HPQ HP Inc

By Micah Maidenberg 

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 (March 3, 2020).

Xerox Holdings Corp. has launched an effort to acquire all of HP Inc.'s shares outstanding, valuing the maker of printers, printer supplies and personal computers at nearly $35 billion.

Palo Alto, Calif.-based HP said Monday that its board is evaluating the offer but advised stock owners not to make any decisions regarding their holdings now. HP has said Xerox's offer undervalues its business but that it is open to a different potential deal to combine the two companies.

A deal would join two household names that have been trying to retool their businesses as the need for printed documents declines. HP, which had a market value of $31.8 billion as of Monday's close, is significantly larger than Xerox, whose market capitalization was about $7.1 billion.

Under the deal, Xerox is offering HP shareholders $24 a share in cash and stock.

Shares of HP rose 5.2% to $21.86 Monday, amid a broader market rally, while those for Xerox gained 4.1% to $33.51.

Xerox makes larger printers and copy machines and generates revenue from renting them to businesses and maintaining the devices. HP sells smaller printers, printer supplies and personal computers.

Xerox has argued a combination would create a printer-and-PC behemoth better equipped to deal with industrywide declines in the digital era. It has said the companies could yield cost savings of more than $2 billion by combining forces, though HP has been skeptical of that figure. HP also has cast doubt on Xerox's business prospects.

Last week, HP said it would buy back $15 billion of its stock as it worked to block Xerox from taking it over.

Activist investor Carl Icahn has stakes in both companies and supports a combination.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

March 03, 2020 02:47 ET (07:47 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.