HP Inc has rejected a proposed acquisition by Xerox. In a letter sent to John Visentin, Vice Chairman and CEO of Xerox, HP board of directors unanimously concluded that the bid “significantly undervalues HP and is not in the best interests of HP shareholders”.The HP board 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 recognise the potential benefits of consolidation, and we are open to exploring whether there is value to be created for HP shareholders through a potential combination with Xerox,” said the letter.
It noted Xerox’s decline in revenue from US$10.2 billion to US$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”.
However, HP Inc remains open to a possible acquisition.
“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. We remain ready to engage with you to better understand your business and any value to be created from a combination,” it said.