Xerox threatens HP with hostile buyout after rejection

Xerox gives November 25 deadline to accept $33.5bn after HP rejects offer

0'>Xerox Corp has threatened to go hostile with its $33.5bn buyout for HP Inc if the computer maker does not agree to a “friendly” discussion before November 25.

0'>HP’s board unanimously rejected Xerox’s unsolicited offer of $22 per share on November 17. They said the offer undervalued the company and that they were open to exploring a bid for the US printer maker, according to a Reuters report.

“Xerox will take its compelling case to create superior value for our respective shareholders directly to your shareholders,” the company was quoted as saying in a letter to HP’s board.

HP rejected the offer in spite of pressure from billionaire investor Carl Icahn, who owns significant shares in both businesses.

Icahn told the Wall Street Journal that combining the companies was a “no-brainer”. He added that both HP and Xerox were operating in shrinking, but still potentially profitable, markets.

While Xerox focuses on business printers, HP is bigger in the home printer and personal computer markets. A merger of the two would create what Icahn said he believed would be a balanced portfolio.

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Icahn, who owns a 10.6 per cent stake in Xerox, said he owns a 4.24 per cent stake in California-based HP.

Xerox shares were up 1 per cent on the day at around $38.70 a share. HP shares were down around 0.25 per cent at $19.65 a share.

FURTHER READING: HP board knocks back Xerox takeover bid

FURTHER READING: Acquisition meaning

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