US: HP rejects takeover bid from Xerox

Hewlett-Packard’s Board of Directors has unanimously rejected a bid to be acquired by Xerox, though it did not completely shut down an effort by Xerox to merge the two aging former tech giants.

The Xerox Board began discussing the possibility of buying HP earlier this month. Despite the fact that HP is more than three times its size, Xerox said it was generating cash by selling various stakes in former parts of its business. The Wall Street Journal also reported Xerox had been given the blessing by a major bank to receive lending for the transaction should the deal go through. Xerox sent an unsolicited acquisition proposal on November 5.
Still, the HP Board felt Xerox’s offer “significantly undervalued” the company, according to a letter sent to Xerox Vice Chairman and CEO John Visentin Sunday.

“Our Board of Directors has reviewed and considered your unsolicited proposal dated November 5, 2019 at a meeting with our financial and legal advisors and has unanimously concluded that it significantly undervalues HP and is not in the best interests of HP shareholders,” HP said in the letter. “The Board also considered the highly conditional and uncertain nature of the proposal, including the potential impact of outsized debt levels on the combined company’s stock.”

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