Bringing an end to perhaps one of the most storied hostile takeover bids in the history of tech companies, Xerox is abandoning its $35 billion bid for a hostile takeover of HP. This comes as Xerox is now putting its focus, like most companies globally, on coping with the fallouts of the ongoing coronavirus pandemic.
A lot was at stake for senior management and a few investors from both ends, hence the wins and losses in this failed attempt will be well accounted for. For HP CEO Enrique Lores, this will be a massive win. Lores was faced with this hostile takeover attempt almost as soon as he took over the reins of the Palo Alto, California-based company in November last year. And it will be an equally big defeat for Xerox CEO (and former HP exec.) John Visentin who had put all his weight behind the deal.
For billionaire investor Carl Icahn, who own sizeable stake in both companies, this would be an even bigger blow. Icahn has been pushing for this takeover for quite some time, and was instrumental in the continuous sweetening of offer from Xerox, time and again.
Xerox’s decision came after it said earlier this month it would postpone meetings with HP shareholders to focus on coping with the coronavirus pandemic.
In a statement released on the decision, Xerox said, “While it is disappointing to take this step, we are prioritizing the health, safety and well-being of our employees, customers, partners and other stakeholders, and our broader response to the pandemic, over and above all other considerations.”
The printer maker further said, that there remain compelling long-term financial and strategic benefits from combining Xerox and HP. But “the refusal of HP’s Board to meaningfully engage over many months and its continued delay tactics” have proven to be “a great disservice to HP stockholders”, who have shown tremendous support for the transaction.
“HP would like to thank our shareholders, partners, customers and employees for their input and continued support through this process,” HP said in a statement.
Coronavirus pandemic has had a significant economic impact on both HP’s and Xerox’s share prices. However, the former, due to a more diversified business than latter’s, has proved stronger. While Xerox’s primary revenue sources include its printing business, HP was able to offset some impact on its printer’s business by doing relatively well in its PC business.
Earlier, the takeover saga has had a never-ending to and fro from both sides. While Xerox kept on offering sweeter deals, HP continued to reject any consideration to any of the offers received from Xerox. The latest from Xerox was a $35 billion bid, significantly higher from the $24 billion that the company was offering in February this year.