As expected, HP has sent a fairly curt letter to Xerox once again rejecting its bid and stating that the $24 billion financing that Xerox touted at the start of this week “does not address the key issue – that Xerox’s proposal significantly undervalues HP – and is not a basis for discussion.”
The Xerox offer values HP at $33.5 bn, which Carl Icahn, the investor who helped scupper Xerox’s efforts to sell itself to Fujifilm in 2018, has described as a “no-brainer”. Then again, he owns 10.6 percent of Xerox and 4.24 percent of HP so it’s not surprising that he backs this deal. He has previously said that the deal offers cost savings through realising synergies between the two companies, possibly up to $2 bn, as well as the possibility of a more balanced product portfolio. It’s not hard to see why Xerox would be looking to expand on its product range, though it’s less clear as to how this takeover would be good for either HP or its customers.
In their latest letter, Enrique Lores, CEO of HP, and Chip Bergh, chairman of the board of directors reiterated that HP “remains committed to advancing the best interests of all HP shareholders and to pursuing the most value-creating opportunities.”
This is by no means the end of this saga as Xerox will continue to aggressively pursue this takeover – I don’t think that Xerox really has any other option at this stage – though I’m not sure that HP’s board could have made its position any clearer.
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