Xerox turns to public stocks in merger war with HP

Print firm turns up the heat on HP, despite consistent rejections

Xerox has ramped up the stakes in its fight to merge with HP through its plan to launch a tender offer on 2 March, valuing HP’s common stock at $24 (£18.5) per share.

The move comes even after HP’s board of directors unanimously rejected a $30 billion (£23 billion) bid from Xerox this past November, which in contrast, valued HP stock at $22 (£17) per share. HP stated in a letter to Xerox that the offer "significantly undervalues HP and is not in the best interests of HP shareholders".

The letter additionally described Xerox’s offer as “highly conditional and uncertain. In particular, there continues to be uncertainty regarding Xerox’s ability to raise the cash portion of the proposed consideration and concerns regarding the prudence of the resulting outsized debt burden on the value of the combined company’s stock even if the financing were obtained.”

Last month, Xerox further escalated the bounds of its offer by proposing to replace HP’s eleven board members with current and former investment bankers and consultants. The upcoming tender offer will place the financial future for both companies directly into the hands of HP shareholders. 

"We believe HP shareholders will be better served by a new slate of independent directors who understand the challenges of operating a global enterprise and appreciate the value that can be created by realizing the synergies of a combination with Xerox," Xerox CEO John Visentin said in a statement. 

Despite HP’s consistent rejections, both companies have faced economic difficulty in the recent past: HP announced in October its plan to cut between 7,000 and 9,000 jobs by 2022. While HP has seen slight yearly revenue increases since its split from HPE back in 2015, Xerox’s revenue has been consistently falling over recent years.

HP hasn’t directly responded to Xerox’s latest gambit, but is due to announce its first quarter earnings for its 2020 financial year on 24 February. In a statement issued ahead of the announcement, which will be made via live webcast, the company said: “At that time, HP will share additional information about its plan to drive sustainable long-term value for its shareholders, including through the execution of the company’s multi-year strategic and financial plan and the deployment of its strong balance sheet.

“HP wants its shareholders to have full information on the Company’s earnings and the value inherent in the Company before responding to Xerox’s February 10 press release.”

Featured Resources

Digital document processes in 2020: A spotlight on Western Europe

The shift from best practice to business necessity

Download now

Four security considerations for cloud migration

The good, the bad, and the ugly of cloud computing

Download now

VR leads the way in manufacturing

How VR is digitally transforming our world

Download now

Deeper than digital

Top-performing modern enterprises show why more perfect software is fundamental to success

Download now

Recommended

HP Chromebox G3 supports dual 4K monitors
Hardware

HP Chromebox G3 supports dual 4K monitors

22 Sep 2020
HP DreamColor Z27x G2 review: Picture perfect
monitors

HP DreamColor Z27x G2 review: Picture perfect

7 Jul 2020
Xerox becomes latest Maze ransomware victim
ransomware

Xerox becomes latest Maze ransomware victim

2 Jul 2020
HP unveils a host of work-from-home hardware
Hardware

HP unveils a host of work-from-home hardware

26 May 2020

Most Popular

The top 12 password-cracking techniques used by hackers
Security

The top 12 password-cracking techniques used by hackers

5 Oct 2020
iPhone 12 lineup official with A14 Bionic chip and 5G support
Mobile Phones

iPhone 12 lineup official with A14 Bionic chip and 5G support

13 Oct 2020
Google blocked record-breaking 2.5Tbps DDoS attack in 2017
Security

Google blocked record-breaking 2.5Tbps DDoS attack in 2017

19 Oct 2020