Tuesday is D-Day for HP/Compaq merger

The $1.4 billion Intersil/Elantec Semiconductor acquisition, and the final "punches" in the HP/Compaq battle dominated the international world of IT and telecommunications last week.

On Tuesday we should, at long last, know the outcome of the proposed HP/Compaq merger.

Paul Booth.MD, Global Research Partners

At home, the Kunene Technology news and the various financial results stole much of the local IT/telecoms headline space.

• we saw satisfactory year-end figures from Global Technology (compared to the previous 12 months);
• year-end numbers from Micrologix that reflected a compromise solution re financials (revenues very low, and a reverse take-over in process that will change Micrologix from a technology company to a clearing and forwarding business);
• satisfactory interim numbers from Compu-Clearing Outsourcing (revenue up but earnings static) and Crux Technologies (revenue up slightly, but back in the black);
• poor half-year figures from Digicore Holdings (revenue substantially down and earnings also down); and
• profit warnings from Comparex and Intervid.
• Kunene Technology also announced an unbundling that will result in it shedding its entire shareholding in Grintek and lead to a delisting from the JSE.

[Local]

Other local news included:

• the announcement that Comparex is retrenching staff in Europe;
• the opening of a local office by Australian-based software development company, BMS Solutions;
• a further investment by Investec in IQ Business Group, which also gives IQ Business Group 100% ownership of Financial IQ; and
• the appointment of Mike Kersten as the new MD of Protek`s African business.

• we saw yet more investigations into telecom companies` accounting practices, with Qwest and WorldCom being the latest "victims";
• the announcement of an alliance between Infineon Technologies and Taiwanese computer chip manufacturer, Winbond;
• the first concessions by Microsoft to the European competition commission;
• the news that Toshiba and Mitsubishi are to link their mobile operations;
• the announcement by SBC that it would like to cash in its 24.5% stake in Belgacom;
• the news that KPMG Consulting is to change its name soon;
• several new senior appointments at Accenture;
• the bailing out of Groupe Bull, yet again, by the French Government; and
• an announcement from Metawave Comms that it is restructuring.

Additionally, look out for a possible IPO from Yell; the outcome of the talks re a merger between Anderson LLC and Ernst & Young, which if consummated, would create a new consulting giant (Deloitte Touche Tohmatsu LLC and KPMG were also in the frame, but withdrew in the last few days); and the outcome of a take-over approach made to Web-hosting company, TeleCity.

[International]

Other international news included:

• the appointments of Sean Blair as president of Cyborg Systems, Richard Erickson as CEO of AlphaNet Solutions, Lee Jobe as president and COO of Cellport, Ulysses Knotts as CEO of CommerceQuest, Mike Moone as president and CEO of Alloptic and Dan Rooney as president and CEO of Superconductive Components;
• the resignation of Charles Lee, co-chief executive of Verizon Wireless; and
• job loss announcements from Avaya, Groupe Bull, IDT, Metawave and PinkRoccade NV.

We saw excellent figures from Take-Two Interactive.

Good numbers were recorded by Atos Origin, Bestel, Cybertel Comms, Electronics Boutique, Optelecom (back in the black), STM Wireless (back in the black), Ulticom, Visual Analytics and VoiceFlash Networks (back in the black).

Satisfactory results were posted by Faro Technologies and Nyfix.

Mediocre returns came from Adobe, Aladdin Systems, Axon Group, Carreker, CMGI (back in the black), Computacenter, Financial Objects (but back in the black), GCI, Manatron, Merisel (but back in the black), Merrimac, Oracle, Ordina NV, Portugal Telecom, RF Industries, Tektronix, Tikit Group, Ultimate Electronics, Verity and Wi-LAN (but back in the black).

Very poor results were reported by Comtech Telecomms, Comverse Technology and ValueVision Media.

Losses came from 3Dlabs, Arch Wireless, Arel Comms & Software, BATM Advanced Comms, Chyron, Claxson, Conolog, DataMirror, Engage, Exult, FSI International, GigaMedia, Groupe Bull, IDT, Innodata, Ismaning, LoJack, Lowrance Electronics, Knology, Marex, Matav, Microlog, Navidec, NaviSite, NTELOS, Parity Group Plc., Ramtron, Remec, RF Monolithics, SafeNet, Sand Technology, SureQuest Systems, Taitron Components, TCSI, Temenos Group AG, Trafficmaster, V-ONE, Wallace and WireOne.

Other financial news included a share buy-back announcement from IBIZ Technology; profit warnings from Anadigics, Avaya, Computacenter, Comverse Technology, Cree, Electronics For Imaging, EMC, France Telecom, KDDI, KPN Telecom, Lucent Technologies, Nokia and Tetra Tech; share split announcements from Autodesk and IntelliCorp (reverse); and a satisfactory IPO from Anteon International (information systems). Additionally, Metawave Comms announced that it would restate its 2001 financial results.

Locally

Crux (-37.5%)
Dectronic (-62.5%)
E-Data (-33.3%)
Elexir (-33.3%)
Explorer (+25%)
Infowave (+25%)
Integrear (+45.2%)
Intervid (-45.5%)
Jasco (+25%)
OneLogix (-25.5%)Y3K (-33.3%)

Internationally

Applix (+24.6%)
Comdisco (+29.7%)
Cree (-28.2%)
Enherent (-25.6%)
Exchange Applications (+25%)
Informatica (-34.5%)
InterX (+31.7%)
Mitek Systems (+25%)
Tadpole Technology (+39.8%)
Telewest Comms (-27.7%)

On Tuesday we should, at long last, know the outcome of the proposed HP/Compaq merger. If successful, this will be the largest ever IT merger/acquisition (over $20 billion), and will follow months of wrangling and a ferocious battle of words that involved the sons and families of HP`s original founders.