IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

HP rebuffs Xerox takeover bid

Laptop maker says offer “significantly undervalues” the organisation, though it remains open to a deal

hp laptops

Xerox's $30 billion takeover bid for HP has fallen flat, with the company's board unanimously rejecting the proposed deal.

On 7 November it was confirmed that the printer and copier maker was attempting to buy HP, despite the fact it's over three times Xerox's size.

In a letter to Xerox, HP's board of directors said it had "reviewed and considered" the takeover proposal, but found it "significantly undervalues HP and is not in the best interests of HP shareholders".

"In reaching this determination, the board also considered the highly conditional and uncertain nature of the proposal, including the potential impact of outsized debt levels on the combined company's stock," the letter added.

The board also cited Xerox's falling revenue, which fell from $10.2 billion (£7.9 billion) in June 2018 to $9.2 billion (£7.1 billion) in June 2019, as a reason for declining the deal. HP itself is currently valued at $27 billion (£20.8 billion).

The decision is unlikely to come as a surprise to market watchers. HP's initial response stated it had "great confidence in [its] multi-year strategy and... ability to position the company for continued success in an evolving industry", a stance it reiterated in its rejection letter to Xerox.

This isn't necessarily the end of the story, though. HP has said it remains "open to exploring whether there is value to be created for HP shareholders through a potential combination with Xerox". It's unlikely this would take the form of another Xerox bid for HP given the larger company's misgivings about shareholder value and debt, but could be a merger between the two or even HP acquiring Xerox.

"With substantive engagement from Xerox management and access to diligence information on Xerox, we believe that we can quickly evaluate the merits of a potential transaction," HP's board said.

"We remain ready to engage with you to better understand your business and any value to be created from a combination."

Featured Resources

Four strategies for building a hybrid workplace that works

All indications are that the future of work is hybrid, if it's not here already

Free webinar

The digital marketer’s guide to contextual insights and trends

How to use contextual intelligence to uncover new insights and inform strategies

Free Download

Ransomware and Microsoft 365 for business

What you need to know about reducing ransomware risk

Free Download

Building a modern strategy for analytics and machine learning success

Turning into business value

Free Download

Most Popular

Windows Server admins say latest Patch Tuesday broke authentication policies
Server & storage

Windows Server admins say latest Patch Tuesday broke authentication policies

12 May 2022
16 ways to speed up your laptop
Laptops

16 ways to speed up your laptop

13 May 2022
How full-stack observability can accelerate IT innovation
Sponsored

How full-stack observability can accelerate IT innovation

3 May 2022