For the couple of past few months, Xerox has been aggressively pursuing an acquisition of HP’s business. But HP has continually refused to be acquired on Xerox’s given terms. Xerox already proposed a full replacement of HP’s Board of Directors, in light of the pushback, nominating a slate of independent directors that it believes would be more likely to see the worth of the proposal.
Xerox said in last month that it planned to make a tender offer for HP’s outstanding shares, and today it also did the same. Xerox’s tender offer values HP at $24 per share, that is $18.40 of which are in cash and the remaining being equivalent to 0.149 Xerox shares for each of the HP share. With the current offer, the shareholders of HP would get $27 billion in immediate cash, in addition to then owning a portion of Xerox shares.
The CEO and vice-chairman of Xerox, John Visentin commented on the proposal:
“Our proposal offers progress over entrenchment… the HP shareholders will receive $27 billion in immediate, in form of upfront cash while having the significant, long-term upside through the equity ownership in a combined company with greater free cash flow, to invest in growth and return to shareholders.”
It has been announced by Xerox that it has also gathered the financing support from more entities that includes PNC, MUFG and Crédit Agricole, in addition to the Bank of America, Citi and Mizuho, who had already committed to $24 billion to help the business go through. Up till now the financing amount hasn’t increased, but it’s now backed by more agencies.
The offer by Xerox is on the table until April 21, 2020, at 5PM Eastern Time, but Xerox also says that the deadline can be further extended. That should be just in time for the HP’s annual shareholder meeting that was at the end of April last year.