Xerox said Thursday it was holding firm on its $33 billion takeover offer for computer and printer maker HP, and warned it would take the matter to shareholders directly without a deal by Monday. The announcement from the copy machine pioneer came days after HP rejected the bid, claiming it “significantly undervalues” the Silicon Valley firm. Xerox, in a letter to the HP board, said it was “very surprised” by the rejection of the cash-and-stock offer which sets a value of $22 per share for the computing firm.
“Frankly, we are confused by this reasoning in that your own financial advisor, Goldman Sachs & Co., set a $14 price target with a ‘sell’ rating for HP’s stock after you announced your restructuring plan on October 3, 2019,” the Xerox letter said,
The offer represents a 29 percent premium to HP’s recent average trading price, Xerox chairman anc chief executive John Visentin said in the letter.
“Moreover, our offer is neither ‘highly conditional” nor “uncertain as you state,” Visentin wrote.
“There will be NO financing condition to the completion of our acquisition of HP.”
Xerox said it wants “to expeditiously pursue our proposed acquisition” and set a deadline of 2200 GMT Monday for “a friendly combination” agreement.
Absent a deal, Xerox said it would “take its compelling case to create superior value for our respective shareholders directly to your shareholders.”
A tie-up would unite two firms with storied histories: Xerox was founded in 1906 as a maker of photographic paper, named Haloid, and became a household name with its copy machine, first launched in 1958.
HP traces its history back to the firm founded in 1939 by Bill Hewlett and Dave Packard, which began making audio equipment but ended up as one of the early leaders of the Silicon Valley tech industry.
Hewlett-Packard split in 2016, leaving the HP consumer division making printers and PCs, spinning off HP Enterprise for cloud computing and servers.
Xerox developed some of the early technology for the computing industry through its Palo Alto Research Center, but never became a major player in the sector.