Xerox and HP: latest on possible takeover

Jo Francis
Tuesday, November 12, 2019

Xerox has given HP four weeks to carry out due diligence over its possible $22 a share takeover offer, although tensions over who would run the combined entity could stymie the deal according to reports from the US.

Last week it was confirmed that Xerox was readying a potential $27bn (£21bn) bid in cash and shares for the much larger HP business.

Bloomberg has reported that Xerox has offered four weeks of “mutual due diligence” over the proposed deal, according to sources close to the situation. 

It said that while both HP and Xerox have acknowledged privately there is some rationale for combining, “there are potentially intractable disagreements about which should be the buyer and which the seller, which management team should run the pro forma company, and which has a healthier underlying business.”

John Visentin was installed as the CEO of Xerox last year by activist investors Carl Icahn and Darwin Deason. He is also a former executive at HP where he ran the Enterprise Services business. Enrique Lores took over as the new CEO of HP at the beginning of this month

HP could also face pushback from its shareholders. During last year’s Xerox-Fujifilm takeover saga court documents revealed that HP had expressed an interest in buying Xerox at the beginning of 2018, when the Xerox share price was around $30. Xerox shares are currently $38.36.

The $22 a share offer is a 20% premium on HP's share price prior to the news. 

Activist Xerox investor Carl Icahn is yet to comment publicly on the potential takeover deal.

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