HPQ HP Inc

By Colin Kellaher

Xerox Corp. (XRX) said it will begin meeting on Monday with shareholders of HP Inc. (HPQ) to press its case for a $33 billion union of the companies.

In an investor presentation, Xerox said its proposal, worth $22 a share in cash and stock when it was made in November, offers immediate cash value and equity upside to HP's shareholders.

Printer and personal-computer maker HP rejected the offer from its smaller rival as too low and highly conditional, and it has declined to enter into a due-diligence process or merger talks.

In its presentation, Xerox said it believes the equity portion of the deal could be worth about $14 a share for HP holders, before any revenue synergies. Coupled with the $17 cash portion, Xerox said its bid offers a pro-forma implied value of roughly $31 a share for HP holders, who would own 48% of the combined company.

Xerox also said it would maintain its $1-a-share annual dividend, and that the combined company would maintain an investment-grade credit rating.

The Norwalk, Conn., copier maker last month said it would take its bid directly to HP's shareholders after HP refused to engage in a due-diligence process.

Xerox, which is far smaller than HP, is offering $17 a share in cash and 0.137 share for each HP share in a proposal that would require considerable additional borrowing by Xerox to fund the cash portion.

Billionaire investor Carl Icahn, who owns a 10.85% stake in Xerox and a 4.24% interest in HP, last week blasted HP's board for not engaging in talks with Xerox on a merger, which he has called a "no brainer."

HP shares rose 0.3% to $20.57 in early trading Monday, while shares of Xerox edged up 0.6% to $38.01.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

December 09, 2019 10:45 ET (15:45 GMT)

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