HP rejects Xerox's $33.5 billion buyout offer

HP rejects Xerox's $33.5 billion buyout offer

Xerox made a $33.5 billion cash-and-stock offer for HP earlier in November. Photo/Reuters

HP Inc said on Sunday it had rejected an offer from printer maker Xerox Corp to buy the company, saying the $33.5 billion cash-and-stock proposal "significantly undervalues" the personal computer maker.

However, the company also said it remained open to a potential merger with Xerox and that it hoped for further engagement with Xerox management about the merits of a potential deal.

"(The board) has unanimously concluded that it (offer) significantly undervalues HP and is not in the best interests of HP shareholders", the company said.

"In reaching this determination, the Board also considered the highly conditional and uncertain nature of the proposal, including the potential impact of outsized debt levels on the combined company's stock", HP said, adding it had also taken note of Xerox's annual revenue decline in making its decision.

Xerox made the $33.5 billion cash-and-stock offer earlier in November, HP said on Sunday, citing a letter received from Xerox on Nov. 5. HP had confirmed Xerox's bid earlier but only publicly disclosed the offer price on Sunday.

Xerox had offered HP shareholders $22 per share that included $17 in cash and 0.137 Xerox shares for each HP share, according to the Nov. 5 letter. The offer would have resulted in HP shareholders owning about 48% of the combined company.

Activist investor Carl Icahn, who has recently taken a stake in HP, was pushing for its merger with Xerox, the Wall Street Journal reported on Thursday