HP rejects latest Xerox offer

Another week and another round in Xerox’s ongoing efforts to acquire HP and spread a little amusement to liven up an otherwise dreary week.

Xerox has previously announced its intention to launch a bid at the start of March for HPs shares, offering $24.00 per share, which is made up to $18.40 in cash and 0.149 Xerox shares for each HP share. This offer is set to expire at 5pm EST on April 21 2020. 

Xerox has also lined up some additional backers – MUFG, PNC, Credit Agricole, Truist and Sun Trust Robinson Humphrey – alongside the original players, who have commited $24 billion in financing

John Visentin, vice chairman and CEO of Xerox, commented: “HP shareholders will receive $27 billion in immediate, upfront cash while retaining significant, long-term upside through equity ownership in a combined company with greater free cash flow to invest in growth and return to shareholders.”

Chip Bergh, Chair of HP’s Board of Directors, once again reiterated HP’s position and urging shareholder to reject the Xerox offer, stating: “Our message to HP shareholders is clear: the Xerox offer undervalues HP and disproportionately benefits Xerox shareholders at the expense of HP shareholders.” He added: “The Xerox offer would leave our shareholders with an investment in a combined company that is burdened with an irresponsible level of debt and which would subsequently require unrealistic, unachievable synergies that would jeopardize the entire company.”

HP’s president and CEO Enrique Lores was somewhat blunter, saying: “At HP, we’re creating value, not risk.” He added: “HP is a trusted brand with a strong track record of value creation and we’re executing a clear plan that will drive significant earnings growth. We’re well positioned in our categories, aggressively attacking costs and pursuing the most value creating path for our shareholders.”

HP then restated the same reasons as previously covered along with last week’s financial results here, with a list that is so long that it just looks as though HP doesn’t seem completely convinced by its own arguments, even though the Xerox offer is, in my opinion, completely harebrained. So, at this stage we’re just going through the motions. Xerox has officially made the offer that it had already outlined, and HP has replied with the rejection that it has already made. Now it’s up to the HP shareholders to express their views, either selling up or rejecting the Xerox offer. 

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