Emphasizes need for clear path forward to complete mutual due
diligence
Strongly encourages HP’s Board of Directors not to sanction
further delay
Xerox Holdings Corporation (NYSE: XRX) (“Xerox”) today sent a
letter to members of the Board of Directors at HP Inc. (NYSE: HPQ)
regarding its proposal to acquire HP for $22.00 per share,
comprising $17.00 in cash and 0.137 Xerox shares for each HP
share.
The full text of the letter sent to HP is as follows:
Dear Chip and Enrique,
We were very surprised that HP’s Board of
Directors summarily rejected our compelling proposal to acquire HP
for $22.00 per share, comprising $17.00 in cash and 0.137 Xerox
shares for each HP share, claiming our offer "significantly
undervalues" HP. Frankly, we are confused by this reasoning in that
your own financial advisor, Goldman Sachs & Co., set a $14
price target with a "sell" rating for HP's stock after you
announced your restructuring plan on October 3, 2019. Our offer
represents a 57% premium to Goldman’s price target and a 29%
premium to HP’s 30-day volume weighted average trading price of
$17.
Moreover, our offer is neither "highly
conditional" nor "uncertain" as you state. There will be NO
financing condition to the completion of our acquisition of HP.
While we are glad to see that HP's Board of
Directors acknowledges the substantial merits of a business
combination between Xerox and HP and are open to exploring the
value opportunity for our respective shareholders, your response
lacks a clear path forward. You have requested customary due
diligence, which we have accepted, but you have refused to agree to
corresponding due diligence for Xerox. Any friendly process for a
combination of this type requires mutual diligence—your proposal
for one-way diligence is an unnecessary delay tactic. In light of
favorable markets and terms, Xerox is determined to capture the
compelling opportunity for our respective shareholders and strongly
encourages HP’s Board of Directors not to sanction further delay in
light of our extensive discussions to date.
Xerox remains willing to devote the resources
necessary to complete mutual due diligence over the next three
weeks and confirm the substantial cost and revenue synergies that
we both believe could be achieved through a combination.
The Xerox Board of Directors is determined to
expeditiously pursue our proposed acquisition of HP to
completion—we see no cause for further delay. Accordingly, unless
you and we agree on mutual confirmatory due diligence to support a
friendly combination by 5:00 p.m. EST on Monday, November 25, 2019,
Xerox will take its compelling case to create superior value for
our respective shareholders directly to your shareholders. The
overwhelming support our offer will receive from HP shareholders
should resolve any further doubts you have regarding the wisdom of
swiftly moving forward to complete the transaction.
We look forward to your prompt response.
Sincerely,
John Visentin Vice Chairman and CEO Xerox
Holdings Corporation
Citigroup Global Markets Inc. is acting as Xerox’s financial
advisor and King & Spalding LLP is providing legal counsel to
Xerox and the board of directors. Willkie Farr & Gallagher LLP
is providing legal counsel to Xerox’s independent directors.
About Xerox
In the era of intelligent work, we’re not just thinking about
the future, we’re making it. Xerox Holdings Corporation is a
technology leader focused on the intersection of digital and
physical. We use automation and next-generation personalization to
redefine productivity, drive growth and make the world more secure.
Every day, our innovative technologies and intelligent work
solutions—Powered by Xerox®—help people communicate and work
better. Discover more at www.xerox.com and follow us on Twitter at
@Xerox.
Forward Looking Statements
This communication, and other written or oral statements made
from time to time by management contain “forward-looking
statements” as defined in the Private Securities Litigation Reform
Act of 1995. The words “anticipate”, “believe”, “estimate”,
“expect”, “intend”, “will”, “should”, “targeting”, “projecting”,
“driving” and similar expressions, as they relate to us, our
performance and/or our technology, including statements regarding
the proposed transaction, benefits and synergies of the proposed
transaction and future opportunities for the combined company, are
intended to identify forward-looking statements. These statements
reflect management’s current beliefs, assumptions and expectations
and are subject to a number of factors that may cause actual
results to differ materially. Such factors include but are not
limited to the ultimate outcome of any possible transaction between
Xerox Holdings Corporation (“Xerox”) and HP Inc. (“HP”), including
the possibility that the parties will not agree to pursue a
business combination transaction or that the terms of any
definitive agreement will be materially different from those
described herein; uncertainties as to whether HP will cooperate
with Xerox regarding the proposed transaction; Xerox’s ability to
consummate the proposed transaction with HP; the conditions to the
completion of the proposed transaction, including the receipt of
any required shareholder approvals and any required regulatory
approvals; Xerox’s ability to finance the proposed transaction with
HP; Xerox’s indebtedness, including the substantial indebtedness
Xerox expects to incur in connection with the proposed transaction
with HP and the need to generate sufficient cash flows to service
and repay such debt; the possibility that Xerox may be unable to
achieve expected synergies and operating efficiencies within the
expected time-frames or at all and to successfully integrate HP’s
operations with those of Xerox; that such integration may be more
difficult, time-consuming or costly than expected; that operating
costs, customer loss and business disruption (including, without
limitation, difficulties in maintaining relationships with
employees, customers or suppliers) may be greater than expected
following the proposed transaction or the public announcement of
the proposed transaction; the retention of certain key employees
may be difficult; and general economic conditions that are less
favorable than expected. Additional risks that may affect Xerox’s
operations and other factors that are set forth in the “Risk
Factors” section, the “Legal Proceedings” section, the
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” section and other sections of Xerox
Corporation’s 2018 Annual Report on Form 10-K, as well as in Xerox
Corporation’s and Xerox Holdings Corporation’s Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K filed with the SEC. These
forward-looking statements speak only as of the date of this
communication or as of the date to which they refer, and Xerox
assumes no obligation to update any forward-looking statements as a
result of new information or future events or developments, except
as required by law.
Additional Information
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. This communication
relates to a proposal that Xerox has made for a business
combination transaction with HP. In furtherance of this proposal
and subject to future developments, Xerox (and, if applicable, HP)
may file one or more registration statements, proxy statements,
tender offer statements or other documents with the Securities and
Exchange Commission (the “SEC”). This communication is not a
substitute for any proxy statement, registration statement, tender
offer statement, prospectus or other document Xerox and/or HP may
file with the SEC in connection with the proposed transaction.
Investors and security holders of Xerox and HP are urged to read
the proxy statement(s), registration statement, tender offer
statement, prospectus and/or other documents filed with the SEC
carefully in their entirety if and when they become available as
they will contain important information about the proposed
transaction. Any definitive proxy statement(s) or prospectus(es)
(if and when available) will be mailed to shareholders of Xerox
and/or HP, as applicable. Investors and security holders will be
able to obtain free copies of these documents (if and when
available) and other documents filed with the SEC by Xerox through
the web site maintained by the SEC at www.sec.gov, and by visiting
Xerox’s investor relations site at www.xerox.com/investor.
This document shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended.
This communication is neither a solicitation of a proxy nor a
substitute for any proxy statement or other filings that may be
made with the SEC. Nonetheless, Xerox and its directors and
executive officers and other members of management and employees
may be deemed to be participants in the solicitation of proxies in
respect of the proposed transactions. You can find information
about Xerox’s executive officers and directors in the Current
Report on Form 8-K filed by Xerox Holdings Corporation with the SEC
on July 31, 2019, the prospectus filed by Xerox Holdings
Corporation with the SEC on April 23, 2019 and the Annual Report on
Form 10-K for the year ended December 31, 2018 filed by Xerox
Corporation with the SEC on February 25, 2019. To the extent
holdings of Xerox securities by Xerox’s executive officers and
directors have changed from the amounts of securities of Xerox
Corporation (the predecessor issuer to Xerox Holdings Corporation)
held by such persons as reflected in the prospectus filed by Xerox
Holdings Corporation with the SEC on April 23, 2019, such changes
have been or will be reflected on Statements of Change in Ownership
on Form 4 filed with the SEC. Additional information regarding the
interests of such potential participants will be included in one or
more registration statements, proxy statements, tender offer
statements or other documents filed with the SEC if and when they
become available. These documents (if and when available) may be
obtained free of charge from the SEC’s website www.sec.gov, and by
visiting Xerox’s investor relations site at
www.xerox.com/investor.
Note: To receive RSS news feeds, visit
https://www.news.xerox.com. For open commentary, industry
perspectives and views, visit http://twitter.com/xerox,
http://www.facebook.com/XeroxCorp,
https://www.instagram.com/xerox/,
http://www.linkedin.com/company/xerox,
http://www.youtube.com/XeroxCorp.
Xerox® and Powered by Xerox® are trademarks of Xerox in the
United States and/or other countries.
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version on businesswire.com: https://www.businesswire.com/news/home/20191121005537/en/
Media Contact: Caroline Gransee-Linsey, Xerox,
+1-203-849-2359, Caroline.Gransee-Linsey@xerox.com
Investor Contact: Ann Pettrone, Xerox, +1-203-849-2590,
Ann.Pettrone@xerox.com
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