HP tells Xerox not to force takeover

(Image credit: Shutterstock / ricochet64)

HP has delivered a scathing letter to its shareholders, criticising Xerox’s decision to continue its pursuit of a hostile takeover amid the ongoing global crisis.

Although Xerox announced it would freeze its acquisition campaign, the company will advance its tender offer worth $24.00 per share (or $18.40 and 0.149 Xerox shares).

Xerox will also sustain its nomination of candidates to replace the HP Board of Directors, which will be formally tabled at HP’s 2020 Annual Meeting of Stockholders on April 1.

“We believe HP shareholders will be better served by a new slate of independent directors who understand the challenges of operating a global enterprise and appreciate the value that can be created by realising the synergies of a combination with Xerox,” said John Visentin, Xerox CEO.

Xerox HP takeover

After an initial bid was rejected by HP in early November, Xerox confirmed it would take the offer (then worth $33.5bn) directly to its rival’s shareholders.

In an open letter to HP, Visentin said the company’s “refusal to engage in mutual due diligence with Xerox defies logic”.

“While you may not appreciate our ‘aggressive’ tactics, we will not apologise for them. We plan to engage directly with HP shareholders to solicit their support in urging the HP board to do the right thing and pursue this compelling opportunity,” he added.

HP responded with an aggressive share buyback plan, in a bid to ward off an improved takeover approach worth $35 billion. The move will restore roughly half of HP’s market capitalisation to investors, significantly increasing the company’s debt ratio.

Xerox’s refusal to back down, especially in the context of the ongoing pandemic, has infuriated HP leadership, prompting the letter issued to shareholders. 

“It is important for shareholders to understand that, under these circumstances and consistent with our fiduciary duties, we believe that we should not divert valuable time, attention and resources to a dialogue with Xerox about its proposed transaction,” said the letter.

“Any complex, large-scale, highly leveraged transaction in the current economic environment could be disastrous for HP, its shareholder and our entire ecosystem. While we remain open-minded about M&A as a tool to add value for HP shareholders at the right time and on the right terms - it’s abundantly clear that now is not that time.”

Current HP board members have backed the decision to reject Xerox’s takeover bid.

Via ZDNet

TOPICS
Joel Khalili
News and Features Editor

Joel Khalili is the News and Features Editor at TechRadar Pro, covering cybersecurity, data privacy, cloud, AI, blockchain, internet infrastructure, 5G, data storage and computing. He's responsible for curating our news content, as well as commissioning and producing features on the technologies that are transforming the way the world does business.

Latest in Pro
Finger Presses Orange Button Domain Name Registration on Black Keyboard Background. Closeup View
I visited the world’s first registered .com domain – and you won’t believe what it’s offering today
Racks of servers inside a data center.
Modernizing data centers: an efficient path forward
Dr. Peter Zhou, President of Huawei Data Storage Product Line
Why AI commonization is so important for business intelligent transformation and what Huawei’s data storage has to offer
Wix automation
The world's leading website builder aims to save businesses time with new tool
Data Breach
Thousands of healthcare records exposed online, including private patient information
China
Juniper patches security flaws which could have let hackers take over your router
Latest in News
Google Pixel 8a in aloe green showing
Google Pixel 9a benchmark link teases the performance of the upcoming mid-ranger
Quordle on a smartphone held in a hand
Quordle hints and answers for Monday, March 17 (game #1148)
NYT Strands homescreen on a mobile phone screen, on a light blue background
NYT Strands hints and answers for Monday, March 17 (game #379)
NYT Connections homescreen on a phone, on a purple background
NYT Connections hints and answers for Monday, March 17 (game #645)
Apple iPhone 16 Pro HANDS ON
Leaked iPhone 17 dummy units may have given us our best look yet at all four models
A super close up image of the Google Gemini app in the Play Store
It's official: Google Assistant will be retired for phones this year, with Gemini taking over