HP Inc in last week rejected the Xerox Corp offer to buy it for $33.5 billion cash-and-stock and reiterated the same on Sunday saying Xerox offer significantly undervalued HP.
Earlier this month on Nov. 5, Xerox in its letter to HP offered a buyout bid to acquire HP for $33.5 billion or $22 for each of the HP’s share, in which $17 was offered in cash while rest was offered in form of 0.137 Xerox share for each share of HP. But last week HP came rejecting that offer and instead said that it is open to explore its own bid for U.S. printer maker.
In its letter, that was made public last Sunday, HP wrote that it reiterates that it reject Xerox’s proposal as it significantly undervalues HP.
There is also an uncertainty about ability of Xerox to raise such huge amount of cash proposed in the offer while concerns should also be there regarding the prudence of bulk of debt burden that would be created on the stock of combined company even after obtaining any sort of financing, HP added in its letter.
Earlier this month, Xerox came resolving a dispute with its joint venture partner Fujifilm Holdings Corp, but that resolution symbolizes potential liabilities of billions of dollars for the printer maker firm.
HP, referring to exit of Xerox from that joint venture with Fujifilm, in its letter showed its concerns about the Xerox left with a sizeable strategic hole in its portfolio after exiting the JV.
In last week on Thursday, Xerox threatened to take that buyout bid hostile, if HP did not agree to a “friendly” discussion and also demanded personal computer maker to open its books before Monday this week.
HP is the company which has a bigger size of more than three times than that of the Xerox.