Members of the HP board have said, this Sunday, that they have unanimously declined Xerox Holdings Corporations’ offer, saying that the offer of $33.5bn undermines the value of the company, and that it’s not in the shareholders’ best interest.
HP CEO Enrique Lores, and Board Chair Chip Bergh, told Xerox’s representatives they’re worried that the contract’s details as they stand now, could potentially harm the company in the future. However, they added that they recognised the potential benefits of the consolidation, hinting that the two companies should continue the negotiations.
Xerox offered $22 per share, including $17 in cash, plus 0.137 of its own shares for each HP share. Xerox is valued at $8.5bn, while HP is valued at $22bn.
Xerox boss John Visentin recently said that the merger could save both companies $2bn a year.
“We note the decline of Xerox’s revenue from $10.2 billion to $9.2 billion (on a trailing 12-month basis) since June 2018, which raises significant questions for us regarding the trajectory of your business and future prospects,” the board wrote.
“In addition, we believe it is critical to engage in a rigorous analysis of the achievable synergies from a potential combination,” the board wrote. “With substantive engagement from Xerox management and access to diligence information on Xerox, we believe that we can quickly evaluate the merits of a potential transaction.”