Crossed cables

9 December 2019 By John Foley Follow @johnsfoley

The photocopier maker has laid out its detailed case for buying HP for $33 bln, but ambitious cost-saving goals are of little use if its much larger rival isn’t interested. A genuinely hostile bid would be illogical even if it were possible. Xerox risks looking desperate.

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In a presentation emailed on Dec. 9, Xerox set out how it would derive $2 billion of annual cost savings from its proposed $32.6 billion acquisition of HP and called on its target’s shareholders to pressure the company’s board to engage in discussions with Xerox.

Xerox said it could realize the cost cuts within two years, and added that it had identified up to $1.5 billion of extra revenue that might come from combining the companies.

The photocopier maker has offered $22 per HP share for its larger rival, consisting of $17 in cash and 0.137 new Xerox shares per HP share, equivalent to just under half the merged company.

HP on Nov. 24 reiterated its rejection of Xerox’s proposal, saying it “significantly undervalues” HP.

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