HP has once again rejected a takeover bid from Xerox. In a letter to Xerox, the company stated it is not interested. Earlier, HP still let on that there might have been a chance.
HP’s letter to Xerox CEO John Visentin is a response to Xerox’s letter last week, writes Silicon Angle. At the time, Xerox threatened to make a direct offer to the shareholders if HP did not set up a financial investigation to look into a takeover by 11:00 p.m. CET. This would mean that a hostile offer would be made.
Xerox threatened with such a hostile bid because it believes that HP used an ‘unnecessary delaying tactic’. HP apparently refused to allow Xerox to investigate its finances. At the same time, HP themselves are allowed to investigate Xerox’s finances.
It is not yet known whether Xerox will indeed go directly to the shareholders of HP. Moreover, it is not at all clear whether the company will get its way with the shareholders.
The reason HP did not accept the bid is because it believes that the company is undervalued with the bid. That argument was already used by HP on the first occasion that a bid was rejected.
Xerox said they were surprised by that remark last week. The company offered 22 dollars (19.95 euros) per share, which amounts to a total of 33.5 billion dollars (30 billion euros). However, according to Xerox, HP’s financial advisor Goldman Sachs set a much lower price target of $14 per share in October.
“Our offer is 57 percent higher than Goldman Sachs’ price point and 29 percent higher than HP’s average trading price of $17 per share,” Xerox said in their letter last week. In that letter, Xerox made it clear that they were absolutely determined to take over HP.
Xerox wants to set up a much larger organisation in combination with HP, hoping to be able to compete better in the printer market. This market has been shrinking for some time now, and both companies are suffering from this.