PC and printer maker HP Inc. announced Thursday that it would reject a roughly $35 billion exchange offer from competitor Xerox. HP’s board of directors unanimously voted to urge the company’s shareholders to reject the deal, arguing that the terms undervalued HP.
Xerox made the unsolicited offer earlier this week, the latest salvo in a lengthy back-and-forth in which HP has consistently turned down Xerox’s merger efforts. Xerox made an initial takeover offer of roughly $33.5 billion in November and, following HP’s rejection, vowed to take its case directly to HP shareholders.
This week’s tender offer called for Xerox to acquire all outstanding shares of HP for $24 per share, with a breakdown of $18.40 in cash and 0.149 Xerox shares for each HP share.
In a Thursday press release, HP characterized Xerox’s urgency — as well as other recent Xerox moves, such as submitting its own slate of director nominees for HP’s next round of board elections — as evidence of Xerox’s “desperation.”
“Our message to HP shareholders is clear: the Xerox offer undervalues HP and disproportionately benefits Xerox shareholders at the expense of HP shareholders,” HP board chair Chip Bergh said in a statement. “The Xerox offer would leave our shareholders with an investment in a combined company that is burdened with an irresponsible level of debt and which would subsequently require unrealistic, unachievable synergies that would jeopardize the entire company.”
History in Vancouver
HP is based in Palo Alto, Calif., and has a significant presence in Vancouver dating back to 1979, when its corporate predecessor, The Hewlett-Packard Co., began local manufacturing operations.
The company renamed itself HP in 2015 after splitting off from its enterprise services division. Although its manufacturing operations have been outsourced, HP remains one of Vancouver’s largest employers, operating out of two office buildings in the Columbia Tech Center.
The city of Vancouver announced in December that HP planned to build a new corporate campus at Section 30, the site of the former English Pit gravel mine, about a mile northeast of the Columbia Tech Center.
The plan calls for HP to acquire 68 acres at Section 30 and initially develop 28 of them, with further development possible in the future. The city would chip in $10 million to build out the surrounding roads and infrastructure in the hopes that HP’s initial investment would kick start the development of a new business park.
City staff told The Columbian last week that HP had closed on the acquisition of the 68 acres. HP never directly confirmed the plans for the new campus, but the company did confirm the acquisition.
“We have a long history in Vancouver, and this purchase supports our long-term commitment to our local business,” the company said in an emailed statement. “We have no immediate plans to change our existing real estate footprint in Vancouver.”
