No word on future of Mac products after HP-Compaq merger

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Now that Hewlett Packard is buying Compaq, what effect will this have on HP's line of Mac compatible inkjets and printers? The crystal ball is murky.

An HP spokesperson told MacCentral that it wasn't appropriate to comment on such matters right now because the business deal was just announced Monday. She said that it would probably be a "couple of months" before any official announcements and decisions are made.

Note that HP has announced NO plans to dump its Mac product line. The company is simply dealing with other items on its agenda before deciding what, if any changes, will be made for their line of imaging products.

Meanwhile, Wall Street isn't taking the Hewlett Packard-Compaq deal well. HP shares went down 7.5 percent after the Street got word of the deal.

In case you missed the news, late Monday HP announced plans to acquire Compaq in a stock swap. It was one of the largest deals in technology history. However, investors haven't been impressed. HP's stock has lost about one-quarter of its value since Friday, dropping $5.73 to $17.48 yesterday. That drop sank the value of the deal to around $18.5 billion.

Unlike some mergers, which have "collars"-- share price thresholds where one of the companies can walk away from a deal -- HP's deal with Compaq is at a fixed ratio, meaning the two companies -- and their share prices -- are "connected at the hip," according to CNET . The terms of the deal call for every share of Compaq stock to be exchanged for 0.6325 of a share of HP stock.

"We are puzzled why HP would acquire Compaq as well as why Compaq would sell-out to HP at what is little to no premium," Merrill Lynch analyst Steven Fortuna said in a research report, according to CNET. "If we were Compaq shareholders, we would be disappointed by this proposed transaction given the combined company would have a high degree of customer and product overlap."

This story, "No word on future of Mac products after HP-Compaq merger" was originally published by PCWorld.

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