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HP's board of directors announced on Sunday that it had unanimously rejected a proposal by Xerox to acquire the company because the offer was not in the best interests of shareholders and would underestimate HP.
Xerox offered $ 22 per share on its tender offer to HP. The bid consists of 77% cash and 23% shares or $ 17 in cash and 0.137 Xerox shares for each HP share.
"In making this decision, the Board also considered the highly conditional and uncertain nature of the proposal, including the potential impact of excessive debt on the Combined Company's stock," the Board wrote in a letter to John Visentin, CEO of Xerox.
HP announced in October that it would cut 7,000 to 9,000 jobs as part of a larger restructuring plan by the end of fiscal 2022, saving an estimated $ 1
The software company has a value of $ 29 billion and is three times the size of Xerox, which manufactures printers and copiers of market capitalization.
"We note that Xerox's revenue has dropped from $ 10.2 billion to $ 9.2 billion (after 12 months) since June 2018. This raises significant questions regarding business performance and performance the future prospects. "wrote the board.
"In addition, we consider it crucial to undertake a rigorous analysis of the synergies that can be achieved from a possible combination," wrote the board. "We believe that Xerox's comprehensive commitment and access to accurate information about Xerox enables us to quickly assess the merits of a potential transaction." Company – Hewlett Packard Enterprise – which sells, among other things, data storage devices and servers.
Activist investor Carl Icahn, who holds a 10.6 percent stake in Xerox, has recently bought a $ 1.2 billion stake in HP. He urged the merger of the two companies, believing that a combined company would be in the best interest of both shareholder groups, given the potential for cost reduction and a balanced portfolio of printer options.