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Industry

Xerox stands by "aggression"

After HP rejected Xerox’s £26bn cash-and-stock offer, claiming it “significantly undervalues” the company, Xerox has issued its latest letter in response, in which it has taken a hostile approach.

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Xerox plans to appeal directly to HP’s shareholders

In a letter penned to Xerox by HP directors Enrique Lores and Chip Bergh, the pair described Xerox’s delivery of its offer as “aggressive” and accused the company of being “intent on forcing a potential combination on opportunistic terms without providing adequate information”.

The directors also included a list of concerns in the letter which included a fall in revenue from $10.2bn (£7.9bn) to $9.2bn (£7.1bn) since June 2018, and concerns over the state of Xerox’s technology resources, research and development pipeline, and future product programs.

Xerox vice chairman and chief executive officer John Visentin was quick to respond and has issued his latest letter which describes HP’s refusal as a defiance of logic, as well as addressing the concerns raised.

The most efficient way to prove out the scope of this opportunity with certainty is through mutual due diligence, which you continue to refuse and we are obligated to require

Visentin says: “While you may not appreciate our ‘aggressive’ tactics, we will not apologise for them. The most efficient way to prove out the scope of this opportunity with certainty is through mutual due diligence, which you continue to refuse and we are obligated to require.”

Addressing the concerns raised, Visentin adds: “It is important that we correct, for your benefit and that of HP’s shareholders, a few of the mischaracterisations from your last letter.

“On February 5th, 2019, Xerox announced a three-year strategic plan that was built on four initiatives: (i) optimising operations, (ii) driving revenue, (iii) reenergising innovation and (iv) focusing on cash flow and capital return. We are already outperforming this plan.” He goes on to list three more responses.

As a result, Xerox has now confirmed plans to engage directly with HP shareholders in a bid to gain their support.

If you have any news, please email carys@linkpublishing.co.uk or join in with the conversation on Twitter and LinkedIn.


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