Citing the economic and health effects of the ongoing coronavirus pandemic, Xerox on Tuesday said it is dropping its nearly five-month-long unsolicited big to acquire HP.
In a statement released after U.S. stock markets closed, Xerox said it was terminating its tender offer to acquire all of HP’s outstanding shares, and is dropping its plans to nominate a slate of directors at HP’s next annual meeting. Xerox said it was refocusing its efforts because the global coronavirus crisis has “created an environment that is not conducive to Xerox continuing to pursue an acquisition of HP.”
Xerox had most recently raised its acquisition offer to $24 a share, which consisted of cash and Xerox stock, or about $34 billion. In its statement, Xerox said its decision was “disappointing,” but that “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.”
Xerox originally sought to acquire HP in November 2019, and had billionaire activist investor Carl Icahn in its corner. Icahn, who owns close to 11% of Xerox and about 4% of HP, had called the potential combination of the two companies “a no-brainer,” on the grounds that a deal would create a powerhouse in the printing and imaging technology markets.
But, HP rebuffed all of Xerox’s efforts, mostly on the grounds that it believed those bids undervalued he company. In February, HP launched a plan to buy back $15 billion of its stock over three years as part of an effort to return value to its shareholders and make any Xerox acquisition attempt more difficult.
The recent stock market swoon has eaten away a big piece of both Xerox’s and HP’s overall valuations. As of Tuesday’s stock market close, HP had a valuation of almost $25 billion, while Xerox was worth $4 billion.
HP didn’t immediately return a request for comment.
