HP Continues To Resist Xerox Bid
Image Courtesy of HP Inc
In a letter released today, Hp again refused to engage in formal discussions with Xerox, rejecting their latest approach in a formal communication from the HP Board.
Speculation mounts now about how Xerox may be able to proceed, with some commentators predicting an increase of the current offer to $35 billion.
Such an increase would give the Hp board reason to come to the negotiating table, although how such an increase might be funded is the difficult part.
More cash might increase debt beyond investment-grade levels.
And even a small bump in the equity component would result in HP shareholders owning the majority of the new entity.
Meanwhile the take-over dance continues, with some observers predicting that an HP takeover of Xerox is not beyond the realms of possibility.
The full text of HP’s letter is below:
January 8, 2020
John Visentin
Vice Chairman and CEO
Xerox Holdings Corporation
201 Merritt 7 Norwalk, CT 06851-1056
CC: Keith Cozza, Chairman of Xerox Holdings Corporation; President and Chief Executive Officer, Icahn Enterprises L.P.
Dear John,
We reiterate that the HP Board of Directors’ focus is on driving sustainable long-term value for HP shareholders.
Your letter dated January 6, 2020 regarding financing does not address the key issue – that Xerox’s proposal significantly undervalues HP – and is not a basis for discussion.
The HP Board of Directors remains committed to advancing the best interests of all HP shareholders and to pursuing the most value-creating opportunities.
On behalf of the Board of Directors,
[Signature]
[Signature]
Enrique Lores
Chip Bergh
