HP rejects Xerox's 'unsolicited' takeover proposal in stern statement
HP declined a proposal from Xerox of a potential takeover this weekend.
What you need to know
- HP declined an "unsolicited proposal" that would have Xerox take over HP.
- Reports of the potential takeover first surfaced in early November.
- HP states that it's "open to exploring whether there is value to be created for HP shareholders through a potential combination with Xerox."
HP shared details of a potential Xerox takeover of HP in a press release over the weekend. In the release, HP declines Xerox's "unsolicited proposal" and outlines why the company believes the proposed takeover is not in the best interests of its shareholders. While the letter includes several reasons why HP declined the proposal, it also states that HP is "Open to exploring whether there is value to be created for HP shareholders through a potential combination with Xerox."
Reports of a potential takeover of HP by Xerox first emerged in the beginning of November. The press release also includes a letter dated November 5, 2019 of the proposed takeover's terms, including a transaction value of "approximately $33.5 billion," assuming certain conditions involving diluting shares.
HP states that a meeting involving financial and legal advisers "unanimously concluded that [the proposal] significantly undervalues HP and is not in the best interests of HP shareholders."
HP also states that it has "fundamental questions that need to be addressed in [their] diligence of Xerox." HP states to Xerox, "We note the decline of Xerox's revenue from $10.2 billion to $9.2 billion (on a trailing 12-month basis) since June 2018, which raises significant questions for us regarding the trajectory of your business and future prospects."
HP's letter concludes by stating, "We remain ready to engage with [Xerox] to better understand your business and any value to be created from a combination."
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