Printer company increases offer to about $35 billion, says it has met with large HP investors
Xerox is continuing its multi-pronged campaign to buy printer competitor HP Inc., this time upping its bid to about $35 billion.
The Lowdown: The move to increase its proposal comes about three weeks after reports surfaced that Xerox – after having taken a small stake in HP – plans to nominate as many as 11 people to HP’s board in an attempt to push HP into accepting its bid.
The Details: Xerox officials on Monday said the company is increasing its per-share price to $24, which will comprise $18.40 in cash and 0.149 Xerox shares for each HP share. The company will launch the tender offer on or around March 2. Previously, Xerox had offered $22 a share.
This is the third time Xerox has increased its offer to HP since November. HP is a much larger company than Xerox – four times in market size and six times in gross revenue. In announcing the latest bid, Xerox officials again argued for the synergies to be gained by merging the two companies and the value the deal would create for both HP and its shareholders.
In addition, Xerox officials said in the statement that they have met multiple times with many of HP’s largest investors, who they said “consistently state 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 Impact: HP CEO Enrique Lores and the company’s board has repeatedly pushed back against Xerox’s unsolicited bids, arguing that the offers greatly undervalued the company and questioning Xerox’s ability to raise the necessary funds for such an acquisition, even though Xerox announced last month that it had secured $24 billion in financing from three major banks.
HP is getting pressure from among some well-known stockholders, including activist investor Carl Icahn, who owns a 4.2% stake in HP and a 10.9% stake in Xerox and has urged the larger company to accept Xerox’s offer.