HP rejected takeover bid from Xerox, considers price evaluation too low
Computer and printer manufacturer HP has rejected the unsolicited takeover bid from copier and printer manufacturer Xerox. Xerox recently expressed its interest in the much larger HP, for which it generates more than $ 33 billion in shares and cash. A deal would merge two of the biggest names in the field of office equipment.
But HP states in a statement that, after discussions with financial and legal advisers, the board unanimously came to the conclusion that the offer does not accurately reflect the value of the company. It also points to the mountain of debt that would result in a deal.
The international market for printing and copying equipment has been under pressure for some time due to the movement of companies to the cloud and other internet services. HP has been struggling for years in the personal computer market, recently appointed a new top executive and cut hard in its workforce to save costs. The print division of the company, currently an important source of profit, is also seeing revenue decline
Activist investor Carl Icahn recently said he was a strong proponent of the merger of the two American companies. Icahn has a 10.6 percent interest in Xerox. He is also a shareholder of HP, with a stake of just over 4.2 percent. The 83-year-old billionaire saw major cost benefits in a merger. “The combination is a no-brainer,” he told business newspaper The Wall Street Journal. “I strongly believe in synergies.”