Will Xerox Takeover HP?

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Reports earlier last week suggested that Xerox had a level of interest in making a bid for HP Inc – could Xerox be set to takeover HP?

As first detailed by the Wall Street Journal, Xerox have been making waves in the press recently after hinting that they saw interest in launching a takeover bid for the computing giant HP.

It was suggested that a meeting between board members at Xerox was held in order to discuss plans relating to making a bid for the HP business, something which would create an estimated $2 billion (approx. £1.5 billion) in overall synergies.

The news has come as a surprise to many in the media, as rumours have floated around previously that it would in fact be HP themselves that would be looking to acquire Xerox and its business model.

But after reaching an agreement to sell their stake in the Fuji Xerox joint business operation solely to former venture partner Fujifilm, the resulting windfall from the settlement means Xerox now have the funds and freedom to begin exploring fresh investment opportunities and acquisition avenues.

Formal Bid for Xerox to Takeover HP Made

And now, as reported by OPI, it looks as though the hearsay has turned out to be true, as Xerox have now made a formal bid to takeover HP.

With the news breaking across several high-profile media outlets, HP have since released a statement regarding the situation, with a spokesperson from the company commenting:

“As reviewed at HP’s most recent Securities Analyst Meeting, we have great confidence in our multiyear strategy and our ability to position the company for continued success in an evolving industry, particularly given the multiple levers available to drive value creation.

Against this backdrop, we have had conversations with Xerox Holdings Corporation from time to time about a potential business combination.

We have considered, among other things, what would be required to merit a transaction.

Most recently, we received a proposal transmitted yesterday.”

They add:

“We have a record of taking action if there is a better path forward and will continue to act with deliberation, discipline and an eye towards what is in the best interest for all out shareholders.”

Will HP Accept?

The big question to stem from the submitted bid remains – will HP accept?

Whilst the overall value of their ambitious bid has yet to be disclosed by either HP or Xerox, news outlet CRN has recently provided their input on why they believe HP may not be so open as to accept Xerox’s takeover offer.

They point out five key factors that may make or break the bid including current PC business strength at the company, the overall print business strategy model, the current restructure and reorganization taking place at HP, overall channel differences and HP’s venture into the 3D printing world.

It has also been tipped that the bid could purely be rejected due to current shareholder interests, something of which HP may be concerned with after Xerox’s previous lengthy and bitter saga to end their merger with Fujifilm which put the reputation of both respective companies at severe risk.

All of this however, remains to be just a talking point until HP officially responds to Xerox’s takeover proposal.

As of the time of writing, that has yet to be the case.

Sam Rose