Xerox Raises Offer for HP, Plans to Launch Takeover Bid in Early March
February 10 2020 - 9:20AM
Dow Jones News
By Dave Sebastian
Xerox Holdings Corp. has raised its offer to buy HP Inc. to $24
a share and said it would launch a public takeover bid in early
March.
The price comprises $18.40 in cash and 0.149 Xerox share for
each HP share, Xerox said Monday. The offer won't be tied to
financing or due-diligence conditions, it added. Xerox offered HP
$22 a share in November.
In premarket trading Monday, HP shares rose 5.2%, and Xerox
shares declined 1.5%.
The company said it has met with some of HP's largest
stockholders before increasing the bid. It said it expects to
launch its campaign to buy shares directly from investors on about
March 2.
"The tender offer announced today will enable these stockholders
to accept Xerox's compelling offer despite HP's consistent refusal
to pursue the opportunity," Xerox said.
The offer represents a 41% premium to HP's 30-day volume
weighted average price of $17 a share. HP shares closed at $21.73
on Friday, valuing the offer at a 10.4% premium.
HP had rejected Xerox's $22-a-share bid as too low and
questioned Xerox's ability to finance it. HP again deemed the offer
too low when Xerox in January said it had secured up to $24 billion
debt financing.
HP didn't respond to a request for comment.
Xerox has said it plans to nominate 11 independent candidates to
replace HP's board at the computer and printer maker's annual
shareholder meeting this summer.
[[https://www.wsj.com/articles/xerox-to-nominate-11-candidates-to-replace-hps-board-11579792536]]
The companies dominate different areas of the printer market and
have both been cutting costs as the need for printed documents
declines. Xerox primarily makes large printers and copy machines,
while HP mainly sells smaller printers and printing supplies. HP is
also one of the biggest PC makers in the world, though its printer
business is more lucrative.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
February 10, 2020 09:05 ET (14:05 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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