In a statement issued today (10 February), the manufacturer announced its intention to launch a tender offer on or around 2 March 2020 for all of HP’s shares at the new price, which is an increase of $2 per share on its initial $22 per share bid.
Xerox said the offer will be comprised of $18.40 in cash and 0.149 Xerox shares for each HP share, which values HP at around $35bn. The tender offer will not be subject to any conditions related to financing or due diligence.
In its statement, the manufacturer said it has met, in some cases multiple times, with many of HP’s largest shareholders.
“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,” Xerox said.
“The tender offer announced today will enable these stockholders to accept Xerox’s compelling offer despite HP’s consistent refusal to pursue the opportunity.”
It added: “The value created by the synergies realised in a combination of Xerox and HP is incremental to any value that HP can create by revising its strategic plan or dramatically changing its capital allocation policy to incorporate additional share repurchases.
“Xerox’s offer provides HP stockholders with both significant, immediate cash value, and meaningful upside via equity ownership in the combined company.”
Xerox’s initial bid for HP, in November 2019, was rejected by HP which felt it undervalued the business and was not in the best interests of its shareholders.
In January 2020, Xerox obtained $24bn in binding financing commitments to support the proposed transaction. HP rejected the proposal and later that month Xerox nominated a slate of directors to HP’s board to be voted on by HP’s shareholders at its 2020 AGM.
At the end of January, HP called Xerox “a company of questionable value” after the business reported a 6.2% revenue drop for 2019 and a 2.2% decline in Q4.
HP’s share price rose by 4.3% to $22.67 in early trading today but had settled down to $22.06 at the time of writing. Xerox’s shares, meanwhile, were up by 2.1% in early trading to $37.96p and were $37.89p at the time of writing.