Xerox Ups HP Bid to $24 Per Share from $22 Per Share
February 10, 2020
launched a tender offer on or around March 2, 2020 for all of the
outstanding shares of common stock of HP at a price of $24.00 per share,
which will be comprised of $18.40 in cash and 0.149 Xerox shares for
each HP share. The tender offer will not be subject to any conditions
related to financing or due diligence.
Xerox has met, in some cases multiple times, with many of HP’s largest stockholders. These stockholders consistently state that they want the enhanced returns, improved growth prospects and best-in-class human capital that will result from a combination of Xerox and HP. The tender offer announced today will enable these stockholders to accept Xerox’s compelling offer despite HP’s consistent refusal to pursue the opportunity.
Immediate Value Creation
The value created by the synergies realized in a combination of Xerox
and HP is incremental to any value that HP can create by revising its
strategic plan or dramatically changing its capital allocation policy to
incorporate additional share repurchases. Xerox’s offer provides HP
stockholders with both significant, immediate cash value, and meaningful
upside via equity ownership in the combined company. The headline offer
price of $24.00 per share represents a 41% premium to HP’s unaffected
30-day volume weighted average trading price of $17.00. The implied
offer value of ~$33 per share2 represents a 94% premium to HP’s
unaffected 30-day volume weighted average trading price of $17.00.
The tender offer will be subject to there being validly tendered and not
withdrawn at least a number of shares representing a majority of the
issued and outstanding shares of HP and other customary conditions for a
transaction of this type.