Xerox increases offer price for HP to $24 per share

Xerox announced its intention to launch a tender offer on or around March 2, 2020 for all of the outstanding shares of common stock of 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. This tender offer will enable these stockholders to accept Xerox’s compelling offer despite HP’s consistent refusal to pursue the opportunity. 

The value created by the synergies realised 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The tender offer will be subject to there being validly tendered and not withdrawn at least a number of shares representing a majority of the issued and outstanding shares of HP and other customary conditions for a transaction of this type.