Xerox sweetens its takeover offer for HP
The two hardware giants have withered in a world increasingly driven by software
New York — Xerox Holdings on Monday increased its offer price for HP to $24 a share, boosting the bid by $2 a share in an effort to win control of the personal computer maker which has previously refused to engage in takeover talks because it said the offer was too low.
Xerox said it plans to launch a tender offer “on or about March 2” that comprises $18.40 in cash and 0.149 Xerox shares for each HP share. The offer will not be subject to any conditions related to financing or due diligence. The offer represents a 41% premium to HP’s 30-day volume weighted average trading price of $17, Xerox said.
The iconic, but struggling, printer maker said in January it planned to nominate 11 directors to replace the HP board in an effort to push the merger through.
HP’s shareholders “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,” Xerox said in the statement.
The two hardware giants have withered in a world increasingly driven by software, and Xerox has argued the tie-up would revive both companies and unlock about $2bn in synergies.
A representative for HP was not immediately available for comment. HP shares rose 4.5% to $22.71 before midday in New York on Monday. They are down 1.3% in the past 12 months.
HP has said there are many routes it could pursue to create value that are not dependent on a combination with Xerox.
Activist shareholder Carl Icahn, who owns about 11% of Xerox and has a 4.3% stake in HP, has pushed for the tie-up. The billionaire has considerable influence over Xerox because he is its largest shareholder. He also played a role in appointing Xerox’s CEO, who was a former consultant to Icahn, and has ties to members of the board, including its chair, who is also the CEO of Icahn Enterprises.