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., printer maker, which is far smaller than HP, last month said it would take its bid directly to HP's shareholders after HP refused to engage in a due-diligence process.

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."

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

(END) Dow Jones Newswires

December 09, 2019 11:46 ET (16:46 GMT)

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