Xerox has hit the pause button in its $US35bn ($57bn) hostile takeover bid for HP because of the coronavirus pandemic.
HP had rejected Xerox’sincreased offer, saying it undervalued the company.
In a statement, John Visentin, vice chairman and chief executive at Xerox, says, “In light of the escalating covid-19 pandemic, Xerox needs to prioritise the health and safety of its employees, customers, partners and affiliates over and above all other considerations, including its proposal to acquire HP.
“As we closely monitor reports from government and healthcare leaders across the globe and work with colleagues in the business community to minimise the spread and impact of the virus, we believe it is prudent to postpone releases of additional presentations, interviews with media and meetings with HP shareholders so we can focus our time and resources on protecting Xerox’s various stakeholders from the pandemic.
“For the avoidance of doubt, Xerox does not consider the market decline since the date of its offer or the temporary suspension of trading in HP shares that occurred on March 10, 2020 and March 12, 2020 as a result of market-wide circuit breakers procedures to constitute a failure of any condition to its offer to acquire HP. Xerox will take the same view on any future temporary trading halts, unless otherwise stated in advance.”
In rejecting the Xerox offer, HP’s Board stated that the offer showed Xerox’s desperation to address its continued business decline. It said, “Xerox does not have experience operating businesses in the sectors in which HP operates, including within personal systems, home printing, and 3D and digital manufacturing. Xerox is essentially offering HP shareholders something they already own.”
HP added that the offer would “create an irresponsible capital structure, resulting in significant risks for HP shareholders”.
