Xerox has upped the ante in its ongoing battle with HP, raising its bid to take control of the California-based company to $35bn (£27bn), around $5bn more than its previous offer.
The tussle between the two companies has been going on for several months now, with HP rejecting previous overtures and questioning Xerox’s ability to fund any takeover, publicly calling its New England-based rival a company of ‘questionable value,’ after it released its financial results for Q4. For its part Xerox has said that synergies between the two companies mean a coming together is an obvious step and insisted that it has funding in place for the takeover, but HP responded by accusing Xerox of undervaluing it and saying that a deal is not in the best interest of its shareholders.
Xerox’s most recent move was to announce its intention to meet directly with HP shareholders and to appoint 11 directors to its board in order to force a deal through. The company seems to hope that its latest offer, which works out to $24 per share (comprised of $18.40 in cash and 0.149 Xerox shares), will entice enough HP shareholders to allow it to get its nominees appointed.
In a statement released on 10 January Xerox claimed that it has ‘met, in some cases multiple times, with many of HP’s largest stockholders. These stockholders 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. The tender offer announced today will enable these stockholders to accept Xerox’s compelling offer despite HP’s consistent refusal to pursue the opportunity.’ HP has yet to respond to either the statement or the offer.
One of the driving forces behind the deal has been activist investor Carl Icahn, who has stakes in both companies, owning approximately 11% of Xerox and 4% of HP.
