Xerox Holdings Corporation has revealed its intention to launch a tender offer for all of the outstanding shares of common stock of HP Inc. at a price of US$24.00 per share.
This comprises of US$18.40 in cash and 0.149 Xerox shares for each HP share.
The company expects the tender offer to launch on or around March 2 and the offer will not be subject to any conditions related to financing or due diligence.
In a statement, Xerox said that the company 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 statement read.
“The tender offer announced today will enable these stockholders to accept Xerox’s compelling offer despite HP’s consistent refusal to pursue the opportunity.
“The tender offer will be subject to there being validly tendered and not withdrawn at least a number of shares representing a majority of the issued and outstanding shares of HP and other customary conditions for a transaction of this type.”
Xerox also mentioned that the value created by the synergies 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,” the company said.
Xerox initially made the unsolicited offer for HP on 5 November 2019, with its vice-chairman and CEO John Visentin writing to HP chairman Chip Bergh, outlining the proposal to combine the two companies and in doing so generating substantial synergies and strength in the balance sheet.
The proposal however was knocked back by Bergh saying the offer “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.
“By harvesting these synergies, which can only be realised with this combination, the new pro forma company will be both more profitable and better positioned to provide customers with a stronger mix of products, services and support than either company can do on its own,” Visentin said previously.
“The value of the transaction goes beyond economics. In consolidating industries, first movers not only win but also have an opportunity to reshape the competitive landscape in an enduring way.”
Xerox also sent a letter to HP’s board of directors confirming that it has obtained US$24 billion in binding financing commitments from Citi, Mizuho and Bank of America to complete its value-creating combination with HP.
However, HP rejected Xerox’s takeover bid yet again.
The Wall Street Journal also reported that Xerox is preparing to nominate up to 11 directors to HP’s board as its mission to push through its US$33 billion unsolicited takeover bid for the computer and print equipment business.
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