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HP’s board has spurned the advances of Xerox, saying the $33.5bn opening bid “significantly undervalues” the business.
In a letter sent today to John Visentin, Xerox’s CEO and vice chairman, HP CEO Enrique Lores and chairman Chip Bergh said the HP board “unanimously concluded” the proposed price falls short of their valuation of HP and is “not in the best interests of shareholders”.
Determination - Board - Nature - Proposal - Impact
“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,” the letter stated.
Lores became CEO at HP this month and his first major action was to outline a major restructure that pretty much erased a layer of senior regional management, multi-year redundancies of 9,000 staff to save costs and also includes a revamped strategy to the way it sells print.
Confidence - Strategy - Ability - Value - HP
“We have great confidence in our strategy and our ability to execute to continue driving sustainable long-term value at HP. In addition, the board and management team continue to take actions to enhance shareholder value including the deployment of our strong balance sheet for increased repurchases of our significantly undervalued stock and for value-creating M&S,” the HP letter stated.
Xerox made the audacious bid for HP on 5 November - at the time...
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