On November 6, after several sources reported Xerox was planning to make a cash and stock offer for HP, HP confirmed the reports, issuing the following statement:

“As reviewed at HP’s most recent Securities Analyst Meeting, we have great confidence in our multi-year strategy and our ability to position the company for continued success in an evolving industry, particularly given the multiple levers available to drive value creation.

Against this backdrop, we have had conversations with Xerox Holdings Corporation (NYSE: XRX) from time to time about a potential business combination. We have considered, among other things, what would be required to merit a transaction. Most recently, we received a proposal transmitted yesterday.  

We have a record of taking action if there is a better path forward and will continue to act with deliberation, discipline and an eye towards what is in the best interest of all our shareholders.”

CNBC reported that Xerox’s cash and stock offer amounted to $22 per share, or $17 in cash and 0.137 Xerox share for each HP share.

Raising eyebrows is the fact that HP’s market value of around $27 billion is more than three times the size of Xerox, valued at approximately $8 billion. While rumors and speculation have centered around an HP-Xerox combination for some time, HP was expected to be the one doing the acquiring.

HP has been through some major changes in recent months, with Dion Weisler stepping down as CEO, to be replaced by Enrique Lores, and a major restructuring announced shortly after — all of which went into effect Nov. 1.

Xerox has also been in the news, with the acquisition rumors beginning less than a day after its announcement of a restructuring of the FUJIFILM relationship. That restructuring would include a sale of Xerox’s 25% stake in Fuji Xerox, a sale of its 51% stake in Xerox International Partners and a dismissal of the $1B lawsuit filed by FUJIFILM against Xerox last year after the failed merger attempt.

In that press release, Xerox CEO John Visentin said “These agreements reset our relationship with FUJIFILM and provide both companies with tremendous opportunities to grow, together and independently. These agreements also unlock significant unrealized value for our shareholders, provide greater clarity for our customers and help us speed our transformation to a digital-first company.”

The release also noted that Xerox “expects to use the proceeds opportunistically to pursue accretive M&A in core and adjacent industries … .”

We’ll be keeping an eye on this story and updating as warranted.

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