Xerox Gets Funding Commitment in Pursuit of HP Inc.
In its continued heated pursuit to acquire HP Inc., and just ahead of the opening of the doors at CES 2020, Xerox Holding Corp. on Monday announced that it has obtained $24 billion in binding financing commitments from Citi, Mizuho and Bank of America to take over the company.
Since Xerox’s initial $33 billion bid to acquire HP, made on Nov. 5, HP has twice rejected offers (both the same) from Xerox, as too low, undervaluing the company. Today, Xerox sent a letter sent to the HP board of directors:
Dear [Board Chair] Chip [Bergh] and [CEO] Enrique [Lores],
“Over the last several weeks, we have engaged in constructive dialogue with many of your largest shareholders regarding the strategic benefits of our proposal to acquire HP. It remains clear to all of us that bringing our companies together would deliver substantial synergies and meaningfully enhanced cash flow that could, in turn, enable increased investments and innovation and greater returns to shareholders.
But it also became clear from dialogue with your shareholders that you and your advisors have been questioning our ability to raise the capital necessary to finance your proposal. We have always maintained that our proposal is not subject to financing contingency, but in order to remove any doubt, we have obtained binding financing commitments (that are not subject to any due diligence condition) from Citi, Mizuho and Bank of America.”
In closing, John Visentin, vice chairman and CEO, Xerox, offered to meet with Chip Bergh, HP Chairman, and Enrique Lores, HP CEO, with or without advisors to get the deal in motion.”
Xerox in early December filed a 33-slide presentation making its case that was made available to all HP shareholders. It highlighted potential revenue growth of up to $1.5 billion as a combined company, large cost reductions, as well as the strength of its direct sales force to complement HP’s partner channel, among other things.
The lately quiet HP, has yet to respond.
In the meanwhile, expect to see HP make product introductions at CES 2020.