Xerox Raises Its Bid to Acquire HP

Xerox has made a new offer of about US$35 billion, including debt, to buy personal computer maker HP, as it seeks to win over the support of its rival’s shareholders in a move that could escalate hostilities between the two companies, reported The Wall Street Journal. 

The latest sweetened offer of US$24 per share — US$18.40 in cash and 0.149 Xerox shares for each HP — represents a 41% premium to HP’s unaffected 30-day stock price.

The Connecticut-based company will take its offer directly to shareholders after HP’s board twice rejected a previous US$22-a-share bid, saying it undervalued the company. Xerox will start its public takeover bid in March by offering to buy shares directly from investors

Xerox announced it had met a number of HP investors as it has been actively trying to convince them of the merits of a combination, but did not name the shareholders to which it had spoken. “The tender offer announced today will enable these stockholders to accept Xerox’s compelling offer despite HP’s consistent refusal to pursue the opportunity,” Xerox said in a statement on Monday, February 10.  

Activist investor Carl Icahn, who owns stakes in both companies and ranks as one of HP’s largest shareholders, has lobbied in favor of a deal.

Full Content: Wall Street Journal

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