Xerox announced yesterday that it is withdrawing its tender offer to acquire HP and its Director nominations.
In its statement, Xerox said that the current global health crisis and resulting macroeconomic and market turmoil caused by COVID-19 have created an environment that is not conducive to the company continuing to pursue an acquisition of HP Inc. “Accordingly, we are withdrawing our tender offer to acquire HP and will no longer seek to nominate our slate of highly qualified candidates to HP’s Board of Directors,” the statement said.
Xerox repeated that it believes that “there remain compelling long-term financial and strategic benefits from combining Xerox and HP,” and added that “the refusal of HP’s Board to meaningfully engage over many months and its continued delay tactics have proven to be a great disservice to HP stockholders, who have shown tremendous support for the transaction.”
Thanking its backers, Xerox said: “Xerox’s Board of Directors and management team are grateful for the significant backing we received from both Xerox and HP stockholders throughout this process. We thank the talented individuals who agreed to stand for election to the HP Board, making time in their busy schedules to take on this responsibility when HP’s existing Board did not. And finally, we thank the banks who agreed to finance this acquisition, who never wavered in their commitments, even during the market turmoil caused by COVID-19.”
HP was quick to respond with its own statement on the matter and said: “We remain firmly committed to driving value for HP shareholders. HP is a strong company with market leading positions across Personal Systems, Print, and 3D Printing & Digital Manufacturing. We have a healthy cash position and balance sheet that enable us to navigate unanticipated challenges such as the global pandemic now before us, while preserving strategic optionality for the future.”
HP said it wants to build on its “strength and resiliency throughout this crisis and position the business for the opportunities ahead.
“HP would like to thank our shareholders, partners, customers and employees for their input and continued support through this process.”
Editor’s Opinion: While the offer has been withdrawn for obvious reasons, the synergy of bringing the two organisations together is still there. So when the pandemic is over and markets reset themselves, expect a fresh bid to be on the table.
