What just happened? Xerox this week said the global health crisis and resulting market turmoil caused by Covid-19 has created an environment that is no longer contributory to their efforts to acquire HP Inc. As such, Xerox is withdrawing its tender offer and is no longer seeking to nominate its own slate of directors to replace HP’s entire Board of Directors.
Xerox in announcing its decision said that while it was disappointing to take this step, they are prioritizing the health, safety and well-being of their employees, partners and stakeholders above all other considerations.
The company also used the opportunity to thank the Xerox and HP stockholders that supported them throughout the process, adding that there remains a compelling long-term financial and strategic benefit by combining the two companies.
HP issued the following statement on the matter:
We remain firmly committed to driving value for HP shareholders. HP is a strong company with market leading positions across Personal Systems, Print, and 3D Printing & Digital Manufacturing. We have a healthy cash position and balance sheet that enable us to navigate unanticipated challenges such as the global pandemic now before us, while preserving strategic optionality for the future.
Our focus remains on addressing the needs of our ecosystem of stakeholders around the world, ensuring that we build on our strength and resiliency throughout this crisis and position the business for the opportunities ahead.
Xerox’s bid felt like a long shot from the get go, especially considering HP Inc.'s market cap was more than three times that of Xerox’s. Add in the uncertainty of today’s market and it’s probably best that cooler heads prevailed.
It's unclear if Xerox will revisit the takeover bid once the pandemic is in the rearview although considering how nasty things got up to this point, nothing would be surprising.
Masthead credit: Katerina Kalugina