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Xerox initiates official U.S.$35B tender offer for HP

Xerox initiates official U.S.$35B tender offer for HP

The new offer is on schedule since its announcement in February

Credit: Photo 80823210 © Jonathan Weiss - Dreamstime.com

Xerox is ramping up its efforts to buy HP with an official tender offer to acquire HP shares at a total of approximately U.S.$35 billion.

The offer consists of buying shares at U.S.$24 apiece – U.S.$18.40 in cash and 0.149 Xerox shares – which was first flagged in February 2020.

John Visentin, vice chairman and chief executive officer of Xerox, said this proposal offers “progress over entrenchment.”

“HP shareholders will receive [U.S.]$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,” Visentin said.

Xerox also urged HP shareholders to elect its nominated independent candidates to HP’s board of directors.

This candidate push may be Xerox’s only short-term means of pursuing HP as the PC maker has barred investors holding more than a 20 per cent stake. In response, Xerox called this a poison pill plan.

"We believe HP shareholders appreciate that the value we could create by combining Xerox and HP outweighs - and is incremental to - anything HP could achieve on its own," a statement from Xerox claimed back in February. 

"Despite the HP board’s intention to deny shareholders the chance to choose for themselves, we will press ahead with our previously announced tender offer and electing our slate of highly qualified director candidates.”

Previously, HP had rejected a takeover bid from Xerox of U.S.$33.5 billion, claiming the offer “significantly undervalues” the PC marker.

However, at the time, HP was still open to dialogue about a potential combination with Xerox.


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