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Xerox is considering making a cash-and-stock offer for HP, which has a market value of about $27 billion, people familiar tell the Wall street Journal.
A bid for HP would have to be huge as it is more than three times the size of Xerox.
HP installed Enrique Lores as the new chief executive last week.
Xerox is gathering cash, expecting $2.3 billion from Tuesday's announcement that it is selling stakes in joint ventures with Fujifilm Holdings, also getting the dismissal of a $1 billion-plus lawsuit filed against Xerox by the Japanese technology company.
The Journal is also reporting that Xerox has received an informal funding commitment from a major bank.
Billionaire investor Carl Icahn owns a 10.6 percent stake in Xerox and began lobbying for changes at the company in 2015.