HP Rejects Another Xerox Acquisition Offer
- Paul Thurrott
- Mar 05, 2020
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15
HP has rejected another takeover offer from Xerox, for $35 billion, claiming that it undervalues the company.
“Our message to HP shareholders is clear: The Xerox offer undervalues HP and disproportionately benefits Xerox shareholders at the expense of HP shareholders,” HP chairman Chip Bergh said in a prepared statement. “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.”
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Xerox announced its intention to acquire HP in November, and it said it would go the hostile route if a deal couldn’t be reached. Its initial offer for HP was $33.5 billion, so it hasn’t really moved the needle too much on price over the past several months.
Xerox not coincidentally also sold its 25 percent stake in Fuji Xerox after investor activism scuttled a deal between the two companies. So HP is plan B, and the firm is believed to want HP mostly for its printer business. But HP is also the second-biggest PC maker in the world.
“At HP, we’re creating value, not risk,” HP president and CEO Enrique Lores says. “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.”