HP Blasts Xerox Bid To Change Its Board -- WSJ
January 24 2020 - 3:02AM
Dow Jones News
By Dave Sebastian
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 24, 2020).
Xerox Holdings Corp. said it plans to nominate 11 independent
candidates to replace HP Inc.'s board at the computer and printer
maker's annual shareholder meeting this summer.
The move, which confirmed an earlier report by The Wall Street
Journal, comes as Xerox pushes a $33 billion unsolicited takeover
bid for HP.
The nominees include former senior executives of Aetna Inc.,
United Airlines Inc. Verizon Communications Inc., Novartis AG and
United Airlines Holdings Inc., among other companies.
"These nominations are a self-serving tactic by Xerox to advance
its proposal, which significantly undervalues HP and creates
meaningful risk to the detriment of HP shareholders," an HP
spokesperson said.
Xerox in November offered to buy its much larger rival for $22 a
share in cash and stock. HP rejected the bid as too low and
questioned Xerox's ability to finance it. HP again deemed the offer
too low when Xerox earlier this month said it had secured up to $24
billion debt financing.
"HP shareholders have told us they believe our acquisition
proposal will bring tremendous value, which is why we lined up $24
billion in binding financing commitments and a slate of highly
qualified director candidates," Xerox Vice Chairman and Chief
Executive John Visentin said Thursday.
HP said Xerox's proposal and board slate is driven by
billionaire investor Carl Icahn, who is pushing Xerox's bid. Mr.
Icahn owns a roughly 11% stake in Xerox and about 4% in HP,
according to FactSet.
"His large ownership position in Xerox means that his interests
are not aligned with those of other HP shareholders," HP said. "Due
to Mr. Icahn's ownership position, he would disproportionately
benefit from an acquisition of HP by Xerox at a price that
undervalues HP."
Mr. Icahn began lobbying for changes at Xerox in 2015. Two years
later, he launched a board fight, telling the Journal at the time
that Xerox "will go the way of Kodak if there aren't major
changes." In 2018, he and Darwin Deason -- among Xerox's biggest
shareholders -- scuttled Xerox's planned merger with Fujifilm, took
control of its board and replaced its CEO with Mr. Visentin.
Mr. Icahn declined to comment.
Xerox in recent weeks bought a small HP stake, giving it the
right to nominate directors for elections to be held at HP's annual
meeting, the Journal reported, citing people familiar with the
matter.
The nominees are: Betsy Atkins, CEO of Baja Corp. and former
chairwoman and CEO of Clear Standards Inc.; George Bickerstaff,
co-founder and managing director of M.M. Dillon & Co.; Carolyn
Byrd, chairwoman and CEO of GlobalTech Financial LLC; Jeannie
Diefenderfer, who served at Verizon for 28 years; Kim Fennebresque,
former chairman, president and CEO of Cowen Group; Carol Flaton,
former managing director at AlixPartners LLP; Matthew Hart, former
president and chief operating officer of Hilton Hotels; Fred
Hochberg, former chairman and president of the U.S. Export-Import
Bank; Jacob Katz, former chairman of Grant Thornton LLP; Nichelle
Maynard-Elliott, former executive director of mergers and
acquisitions for Praxair Inc.; and Thomas Sabatino Jr., former
executive vice president and general counsel of Aetna.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
January 24, 2020 02:47 ET (07:47 GMT)
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