HP has rejected Xerox’s $33.5 billion takeover attempt – again.
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The personal computer maker's board of directors sent a letter to Xerox CEO John Visentin on Sunday evening, saying his company’s offer “significantly undervalues HP.”
HP also said the deal is “highly conditional and uncertain” and questioned Xerox’s ability to raise the cash needed to complete the deal. Even if the money were to be raised, HP’s board questions the size of the debt burden.
HP’s board noted Xerox has “missed consensus revenue estimates in four of the last five quarters.”
In its Nov. 21 letter, Xerox said HP rejecting the offer would cause it to “take its compelling case” directly to HP’s shareholders.
Xerox made the unsolicited offer of $22 per share – $17 in cash and 0.137 Xerox shares for each HP share – on Nov. 5. The deal, which values HP at about four times the amount of Xerox, was initially rejected on Nov. 17.
Activist investor Carl Icahn, who owns a 10.6 percent stake in Xerox and has built up a 4.2 percent ownership position in HP, told The Wall Street Journal that a combination is a “no-brainer.”
Xerox shares are up 97.7 percent year to date and HP’s are down 2.5 percent, while the S&P 500 is higher by 24 percent.