HP Rejects Unsolicited Xerox Proposal

HP Rejects Unsolicited Xerox Proposal

HP has released a response letter to Xerox, to officially reject the unsolicited proposal from Xerox Holdings Corporation to acquire the Company.

In the letter send on November 17, 2019 to John Visentin, Xerox Vice Chairman and CEO, HP mentioned that Xerox proposal significantly undervalues HP and is not in the best interests of HP shareholders.

The letter reads:

“In reaching this determination, the Board also considered the highly conditional and uncertain nature of the proposal, including the potential impact of outsized debt levels on the combined company’s stock.”

“We have great confidence in our strategy and our ability to execute to continue driving sustainable long-term value at HP. In addition, the Board and management team continue to take actions to enhance shareholder value including the deployment of our strong balance sheet for increased repurchases of our significantly undervalued stock and for value-creating M&A.”

HP also said the company recognized the potential benefits of consolidation, and it seems there are possibilities for potential combination with Xerox.

“… as we have previously shared in connection with our prior requests for diligence, we have fundamental questions that need to be addressed in our diligence of Xerox. We note the decline of Xerox’s revenue from $10.2 billion to $9.2 billion (on a trailing 12-month basis) since June 2018, which raises significant questions for us regarding the trajectory of your business and future prospects. In addition, we believe it is critical to engage in a rigorous analysis of the achievable synergies from a potential combination. With substantive engagement from Xerox management and access to diligence information on Xerox, we believe that we can quickly evaluate the merits of a potential transaction.” HP mentioned in the letter.

HP also released the full letter from Xerox on November 5, 2019. You can read the letter HERE.