REUTERS/Chip East
- Xerox threatened to approach HP shareholders with a $33.5 billion buyout bid if the company doesn’t rethink its rejection of the offer.
- The printer company was “very surprised” to hear of the rejection and is “determined to expeditiously pursue” the buyout, Xerox CEO John Visentin wrote in a letter to HP’s directors.
- Visentin laid out a November 25 deadline for HP to rethink its choice, and warned that Xerox will approach HP shareholders with the “compelling case” if an agreement can’t be reached.
- Watch Xerox trade live here.
Xerox may take its buyout offer directly to HP’s shareholders if the company doesn’t rethink its decision to reject a recent $33.5 billion bid, Xerox CEO John Visentin wrote in a letter to HP’s directors.
The printer company was “very surprised” to hear HP’s board rejected the offer, and said HP’s reply “lacks a clear path forward.” Visentin noted that the takeover bid represents a 29% premium over HP’s 30-day average trading price, and that fears of the purchase harming Xerox’s financial stability are unfounded.
“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 rose as much as 1.3% on the news. HP traded as much as 1% higher before paring gains.
The printer manufacturer said it’s still willing to complete the due diligence necessary for a deal, and is “determined to expeditiously pursue” the purchase, the letter said. Xerox’s CEO added that, unless HP agrees to reconsider the offer by November 25 at 5:00 p.m. ET, it will take the offer to shareholders for them to decide on an acquisition.
“The overwhelming support our offer will receive from HP shareholders should resolve any further doubts you have regarding the wisdom of swiftly moving forward to complete the transaction,” Visentin wrote.
The Thursday letter is the latest development in the back-and-forth between the two legacy tech companies. HP’s board of directors rejected the offer in a Monday note, saying the bid “significantly undervalues HP” and isn’t in its shareholders’ best interests. The computer company noted it remains open to future collaboration and the possibility of a smaller transaction.
“We recognize the potential benefits of consolidation, and we are open to exploring whether there is value to be created for HP shareholders through a potential combination with Xerox,” HP CEO Enrique Lores and Board Chairman Chip Bergh said in the Monday letter.
Xerox first extended the bid on November 5, offering a mix of stock and cash for the acquisition. Visentin claimed the cost synergies created from a combined company would reach $2 billion within two years, and that the new firm could take leading roles in new sectors like 3D printing and workflow software.
Both companies have faded from their past popularity as other tech giants stole the spotlight. HP and Xerox in the process of cutting expenses and focusing on core businesses to regain appeal among investors.
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