In a saga that just doesn’t seem to end, HP has yet again declined the takeover offer from Xerox, this time shutting the door on a staggering $35 billion. The company thinks that Xerox has undervalued the company (again!) and doubts Xerox’s position in the market.
This is the second time in just a few weeks that HP has rejected a raised offer from Xerox. The last time was around the first week of February, when HP rejected Xerox’s offer of $24 per share(raising it up by $2 per share from the previous offer). The offer was rejected for the same reason the current offer is not being taken up on. HP believes they are far more valuable.
HP is also worried about the effects a merger will have on the company and its shareholders, saying that it will leave investors with a combined company ridden with debt. This, according to HP, will have to achieve unrealistic and unachievable levels of synergies for a strong footing. Thus, the future of the entire company will be jeopardized.
HP also raised concerns about Xerox’s financial position, and suggested that the desperate hostile takeover is Xerox’s attempt to get out of the financial hole it has found itself in. Xerox’s “urgency” in launching the offer shows its “desperation to acquire HP to address its continued business decline,” according to HP.
The company urged its investors to reject the offer from Xerox stating that it is defined to benefit Xerox shareholders, and is unfair to HP’s.
The company also said that it is going to implement a poison plan to stop investors from amassing more than 20% stake in the company.
However, it is no secret that printing and other ‘hard’ media is on the decline. It felt like printer technology never fully matured, as ink prices are bothersome to this day, often costing as much as the printer itself. Moreover, reliability on these devices is questionable, as inks seldom run into problems like premature dryness. With this in mind and the fact that smartphones, laptops and other media devices has made ‘printing’ almost superfluous, both HP and Xerox, which rely on the art of print for a lot of their earnings are in desperate need of a miracle.