Xerox Threatens HP With Hostile Takeover Bid

Xerox Holdings Corporation (NYSE: XRX) means business when it comes to acquiring computer hardware company HP Inc (NYSE: HPQ). 

If the HP board doesn’t agree to the buyout bid, the veteran printer and copy machine maker will approach the HP shareholders directly, Xerox said on Thursday.

What Happened

Connecticut-based Xerox made a buyout offer to HP earlier in November. The company offered $22 per share to HP stakeholders, with $17 in cash and the rest in Xerox’s own shares.

HP turned down the “unsolicited” offer last week, saying it “significantly undervalues the company.” The California-based company questioned Xerox’s own business prospects and asked for due diligence information before HP even considers its bid.

In a letter addressed to the HP Board on Thursday, Xerox said it found HP’s response both surprising and confusing.

Cooperate Or Lose Face

Xerox said that its deal offered a premium of 57% over the $14 price target set by HP’s financial advisor Goldman Sachs Group Inc (NYSE: GS) after the company’s announcement of restructuring in October.

The company said it wouldn’t agree to any condition of financing for the acquisition.

According to Xerox, HP’s request for “one-way diligence” is an “unnecessary delay tactic.” The company said that HP must agree to mutual diligence to be conducted over the next three weeks.

If the HP board doesn’t agree to the request for prompt mutual due diligence and take forward the deal by Monday, Xerox will talk directly to HP’s shareholders.

“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,” Xerox said in the latter.

Price Action

Xerox closed 1.02% higher at $38.69 on Thursday. HP’s shares closed 0.25% lower at $19.65.