Xerox Holdings Corporation has confirmed that it is withdrawing its tender offer to acquire HP and will no longer seek to nominate its slate of highly qualified candidates to HP Inc’s board of directors as a result of market turmoil caused by COVID-19.
In a statement, the company stated that the current global health crisis and resulting macroeconomic and market turmoil caused by COVID-19 have created an environment that is not conducive to Xerox continuing to pursue an acquisition of HP Inc.
“While it is disappointing to take this step, we are prioritising the health, safety and well-being of our employees, customers, partners and other stakeholders, and our broader response to the pandemic, over and above all other considerations,” the company said.
However, Xerox said it still sees value in a combined business between both companies.
“There remain compelling long-term financial and strategic benefits from combining Xerox and HP. The refusal of HP’s board to meaningfully engage over many months and its continued delay tactics have proven to be a great disservice to HP stockholders, who have shown tremendous support for the transaction,” Xerox said.
“Xerox’s board of directors and management team are grateful for the significant backing we received from both Xerox and HP stockholders throughout this process.
“We thank the talented individuals who agreed to stand for election to the HP Board, making time in their busy schedules to take on this responsibility when HP’s existing Board did not. And finally, we thank the banks who agreed to finance this acquisition, who never wavered in their commitments, even during the market turmoil caused by COVID-19.”
The move by Xerox comes within days of HP issuing a letter to its shareholders, voicing out that now is not the time for the company to be involved in Xerox’s acquisition proposal as it needs to be directing its focus on managing the unprecedented COVID-19 pandemic with “urgency and a deep sense of care”.
“We are committed to doing everything we can to support those in need and respond to the challenges at hand. This pandemic is still unfolding, and it will impact people, the economy and business activities for months, if not longer,” the letter, penned by HP CEO Enrique Lores and HP board of directors chair Chip Bergh stated.
“Our primary responsibility in this difficult period is to focus on HP’s business and address the needs of our ecosystem of stakeholders around the world, including our shareholders, our millions of customers, our 250,000 partners, and our team of approximately 55,000 employees.
“We are actively managing many challenges, including assuring the health and safety of our people, addressing supply chain disruptions, monitoring and addressing our customers’ liquidity needs and, more broadly, ensuring HP is well-positioned to support people working remotely.”
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