Printer giant to give shareholders information Feb. 24 as it pushes back at takeover effort
HP will present investors with its plan to increase shareholder value Feb. 24 as the company works to stave off an unsolicited takeover bid by printer rival Xerox.
The Lowdown: The Palo Alto, California-based PC and printer maker will talk about the plan during a live audio webcast after presenting its fiscal first-quarter financial results.
The Details: The announcement this week comes just days after Xerox again increased its offer to buy HP, this time to $35 billion. Xerox, which made its initial proposal in November, upped its per-share price from $22 to $24 Monday.
HP officials have pushed back at Xerox’s offers, arguing that the proposals have significantly undervalued HP and that they’re comfortable with the company’s plans going forward under CEO Enrique Lores. They also have questioned Xerox’s ability to finance such an acquisition.
Xerox, however, has touted the benefits of a merger of the two printer giants, which have been hurt by the trend away from printing and toward other methods of saving and sharing documents. A combined company could save as much as $2 billion annually and compete better against other printer companies, according to Xerox.
Background: Xerox has been pitching its proposal directly to HP investors, meeting with some of the larger ones multiple times. It also has secured $24 billion in financing from three major banks and has the backing of some high-profile stockholders, such as 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.
The company also reportedly is contemplating putting up candidates for HP’s board of directors.
The Buzz: “HP wants its shareholders to have full information on the company’s earnings and the value inherent in the company before responding to Xerox’s Feb. 10 press release,” HP officials said in a brief statement.
“HP may work on strategies to create value for its shareholders and showcase that value can be created without a takeover. Share buybacks may also be in the cards,” said Aurojyoti Bose, lead analyst at GlobalData. “It would be interesting to see if the $24 per share price is high enough to entice HP shareholders to take the deal, or whether Xerox will be forced to consider further raising the takeover offer.”