Xerox Holdings Corporation has filed for a preliminary proxy statement with the United States Securities and Exchange Commission to seek approvals from its shareholders related to the issuance of Xerox shares in relation to its offer to acquire HP Inc.
Xerox recently released a tender offer to acquire all outstanding shares of HP for US$24.00 per share, comprising of US$18.40 in cash and 0.149 Xerox shares for each HP share.
Xerox expects to call a special meeting where its shareholders can consider proposals to amend the Xerox charter to increase the number of authorised shares of Xerox common stock and to approve the issuance of Xerox shares in connection with a combination with HP.
Xerox aims to announce both the record and meeting dates for the special meeting prior to sending the definitive proxy statement.
The New York Stocks Exchange has temporarily suspended the trading of HP shares as market-wide circuit breaker procedures.
However, Xerox has issued a statement saying it “does not consider this temporary trading halt to constitute a failure of any condition to its offer to acquire HP”.
Xerox has also filed a preliminary proxy statement with the United States Securities and Exchange Commission in support of its slate of independent candidates to replace the board of directors of HP at the latter’s 2020 annual meeting of stockholders.
Following the expansion of HP’s board from 11 to 12 members, Xerox has provided notice to HP that it is adding Erroll B. Davis Jr., former chairman and CEO of Alliant Energy Corporation, to its existing slate of director nominees.
“Today’s filing reflects continued progress towards a combination between Xerox and HP,” Xerox vice-chairman and CEO John Visentin said.
“By nominating a slate of 12 independent, highly qualified candidates for election to HP’s Board, we are giving HP stockholders an opportunity to have a board that will act in their best interests and consider any and all opportunities to create value. We urge them to take advantage of this opportunity.”
Visentin has also urged HP shareholders to “secure superior value” by tendering into Xerox’s offer and electing its director candidates.
The move comes after HP reached out to Xerox to explore if combining the businesses would create value for HP shareholders and add to its strategic and financial plan days after it adopted a $US15 billion shareholder rights plan which Xerox labelled a “poison pill”.
When HP outlined the shareholder rights plan, it also indicated it is open to exploring a possible combination of the two businesses since Xerox first made its $US33b unsolicited offer for HP on 5 November 2019.
This proposal was knocked back by HP with HP chairman Chip Bergh saying it “significantly undervalues HP and is not in the best interests of HP shareholders”.
Visentin then offered HP shareholders US$17 per share in cash and 48 per cent of the pro forma of the combined company, which he said he believes is worth US$14 per share.
HP rejected Xerox’s takeover bid yet again, following which Xerox responded with a potential tender offer for all of the outstanding shares of common stock of HP at US$24.00 per share, which it has now proceeded with.
The tender offer and withdrawal rights will expire at 5pm New York City Time on April 21 unless the offer is extended.
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