{"id":38431,"date":"2020-02-13T11:27:13","date_gmt":"2020-02-13T19:27:13","guid":{"rendered":"https:\/\/www.enxmag.com\/twii\/?p=38431"},"modified":"2020-02-13T11:45:37","modified_gmt":"2020-02-13T19:45:37","slug":"xerox-ups-the-ante-to-34-billion-in-quest-to-acquire-hp","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/the-week-in-imaging-twii\/editors-blog\/2020\/02\/xerox-ups-the-ante-to-34-billion-in-quest-to-acquire-hp\/","title":{"rendered":"Xerox Ups the Ante to $34 Billion in Quest to Acquire HP"},"content":{"rendered":"\n

John Visentin is nothing if not persistent.<\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

The CEO of Norwalk, Connecticut-based Xerox has sweetened\nthe pot, announcing on Monday that the company would increase its bid to\nacquire fellow OEM heavyweight HP for roughly $34 billion, or $24 per share, an\nincrease of $500 million above its initial offer. In a release, the company\nsaid it would launch the tender offer on or around March 2 for all of the\noutstanding shares of HP\u2019s common stock.<\/p>\n\n\n\n

The offer\u2019s breakdown is $18.40 in cash and 0.149 Xerox\nshares for each HP share. The proposal, which represents a $2 increase per\nshare over the original offer\u2014made last November and repeatedly rejected by\nHP\u2014is not subject to financing conditions or due diligence. According to Xerox,\nthe $24 offer represents a 41% premium to HP\u2019s unaffected 30-day volume\nweighted average trading price of $17.<\/p>\n\n\n\n

On\nTuesday, HP said it would respond to Xerox\u2019s tender offer during its Feb. 24\nquarterly earnings conference call. \u201cHP will share additional information about\nits plan to drive sustainable long-term value for its shareholders, including\nthrough the execution of the company\u2019s multi-year strategic and financial plan\nand the deployment of its strong balance sheet,\u201d the company said in a release.<\/p>\n\n\n\n

\u201cHP wants its shareholders to have full information on the company\u2019s earnings and the value inherent in the company before responding to Xerox\u2019s February 10 press release.\u201d<\/p>\n\n\n\n

Raising Stakes<\/strong><\/p>\n\n\n\n

The\nnew Xerox offer appears to respond to HP\u2019s latest refusal, in which the company\nsaid the $33.5 billion initial proposal significantly undervalues HP. That HP\nis withholding a response to the new offer until shareholders have a firm grasp\non the company\u2019s earnings and value seems a pre-emptive case build as to why\nthis new offer also falls short of addressing HP\u2019s value.<\/p>\n\n\n\n

Palo\nAlto, California-based HP has ample reason to carefully measure its response in\ntandem with its latest financials, given that Xerox recently launched a hostile\ntakeover attempt. Late last month, Xerox nominated a new slate of 11 candidates\nfor HP\u2019s board of directors, setting the stage for a proxy battle.<\/p>\n\n\n\n

This\nlatest proposal, Xerox believes, speaks to the feedback it has received from HP\nshareholders. \u201cThese stockholders consistently state that they want the\nenhanced returns, improved growth prospects and best-in-class human capital\nthat will result from a combination of Xerox and HP,\u201d the release continued.\n\u201cThe tender offer announced today will enable these stockholders to accept\nXerox\u2019s compelling offer despite HP\u2019s consistent refusal to pursue the\nopportunity.\u201d<\/p>\n\n\n\n

\"\"
John Visentin, Xerox<\/figcaption><\/figure><\/div>\n\n\n\n

Just\nbefore last Christmas, Visentin took his case to HP\u2019s shareholders via a\n33-page presentation outlining the strengths of a combination, including more than\n$2 billion in cost reductions. Also stoking the fires is billionaire\nshareholder Carl Icahn\u2014HP\u2019s fifth-largest shareholder and the holder of an 11%\nstake in Xerox\u2014who has urged HP shareholders to push for the deal. HP has\naccused Icahn for being a driving force behind the proposals and the hostile\ntone the merger attempt has developed.<\/p>\n\n\n\n

Monday\u2019s missive also underscored the immediate value created through a union of the companies. \u201cThe value created by the synergies realized in a combination of Xerox and HP is incremental to any value that HP can create by revising its strategic plan or dramatically changing its capital allocation policy to incorporate additional share repurchases. Xerox\u2019s offer provides HP stockholders with both significant, immediate cash value, and meaningful upside via equity ownership in the combined company.\u201d<\/p>\n\n\n\n

Xerox has also created a website<\/a> dedicated to providing news and information regarding its push to acquire HP.<\/p>\n","protected":false},"excerpt":{"rendered":"

John Visentin is nothing if not persistent. The CEO of Norwalk, Connecticut-based Xerox has sweetened the pot, announcing on Monday that the company would increase its bid to acquire fellow OEM heavyweight HP for roughly $34 billion, or $24 per share, an increase of $500 million above its initial offer. In a release, the company said it would launch the tender offer on or around March 2 for all of the outstanding shares of HP\u2019s common stock. The offer\u2019s breakdown is $18.40 in cash and 0.149 Xerox shares for each HP share. The proposal, which represents a $2 increase per share over the original offer\u2014made last November and repeatedly rejected by HP\u2014is not subject to financing conditions or due diligence. According to Xerox, the $24 offer represents a 41% premium to HP\u2019s unaffected 30-day volume weighted average trading price of $17. On Tuesday, HP said it would respond to Xerox\u2019s tender offer during its Feb. 24 quarterly earnings conference call. \u201cHP will share additional information about its plan to drive sustainable long-term value for its shareholders, including through the execution of the company\u2019s multi-year strategic and financial plan and the deployment of its strong balance sheet,\u201d the company said in a release. \u201cHP wants its shareholders to have full information on the company\u2019s earnings and the value inherent in the company before responding to Xerox\u2019s February 10 press release.\u201d Raising Stakes The new Xerox offer appears to respond to HP\u2019s latest refusal, in which the company said the $33.5 billion initial proposal significantly undervalues HP. That HP is withholding a response to the new offer until shareholders have a firm grasp on the company\u2019s earnings and value seems a pre-emptive case build as to why this new offer also falls short of addressing HP\u2019s value. Palo Alto, California-based HP has ample reason to carefully measure its response in tandem with its latest financials, given that Xerox recently launched a hostile takeover attempt. Late last month, Xerox nominated a new slate of 11 candidates for HP\u2019s board of directors, setting the stage for a proxy battle. This latest proposal, Xerox believes, speaks to the feedback it has received from HP shareholders. \u201cThese stockholders consistently state that they want the enhanced returns, improved growth prospects and best-in-class human capital that will result from a combination of Xerox and HP,\u201d the release continued. \u201cThe tender offer announced today will enable these stockholders to accept Xerox\u2019s compelling offer despite HP\u2019s consistent refusal to pursue the opportunity.\u201d Just before last Christmas, Visentin took his case to HP\u2019s shareholders via a 33-page presentation outlining the strengths of a combination, including more than $2 billion in cost reductions. Also stoking the fires is billionaire shareholder Carl Icahn\u2014HP\u2019s fifth-largest shareholder and the holder of an 11% stake in Xerox\u2014who has urged HP shareholders to push for the deal. HP has accused Icahn for being a driving force behind the proposals and the hostile tone the merger attempt has developed. Monday\u2019s missive also underscored the immediate value created through a union of the companies. \u201cThe value created by the synergies realized in a combination of Xerox and HP is incremental to any value that HP can create by revising its strategic plan or dramatically changing its capital allocation policy to incorporate additional share repurchases. Xerox\u2019s offer provides HP stockholders with both significant, immediate cash value, and meaningful upside via equity ownership in the combined company.\u201d Xerox has also created a website dedicated to providing news and information regarding its push to acquire HP.<\/p>\n","protected":false},"author":166,"featured_media":38432,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[80,1650,82,1638],"tags":[203],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/38431"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=38431"}],"version-history":[{"count":3,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/38431\/revisions"}],"predecessor-version":[{"id":38435,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/38431\/revisions\/38435"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media\/38432"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=38431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=38431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=38431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}