Xerox Takes Case for HP Deal to Shareholders -- Update
December 09 2019 - 12:01PM
Dow Jones News
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)
Copyright (c) 2019 Dow Jones & Company, Inc.
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