Copy company Xerox has decided to get nasty in its bid to merge with HP and refuses to apologise for “aggressive” tactics.
Xerox said it will approach HP shareholders directly to acquire the firm several weeks after HP’s board rejected a takeover bid in excess of $30 billion.
The company’s leadership has expressed its intent to pursue “aggressive” tactics after initially setting a deadline for 25 November for which it expected HP to engage in mutual due diligence.
These are checks ordinarily performed by two firms ahead of a prospective merger, including assessing a number of areas ranging from financial information to examining legal issues, and any technology and patents.
Xerox had previously complained in a letter sent late last week that HP had refused to commit to performing such checks itself, despite suggesting it was open to future discussions after rejecting the initial $30 billion takeover attempt.
Xerox CEO John Visentin told HP its refusal to engage in mutual due diligence with Xerox defied logic.
“We have already received inquiries from several HP shareholders and are encouraged by their interest in our offer. Nevertheless, rather than engage with us in three weeks of customary mutual due diligence, HP continues to obfuscate and make misleading statements”, he said
He added that Xerox intends to engage directly with HP shareholders, who are apparently interested in the prospect of a merger. The market also understands the logic of this move, Visentin said, because the shares of firms have risen markedly.
Xerox, which is valued at three times less than HP, sees a merger as being beneficial for both firms and has pursued the opportunity aggressively over the course of the month. In particular, Xerox believes that, together, the two companies can create an industry leader with a set of state-of-the-art products across a complete portfolio.
“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”, said Visentin.
“We plan to engage directly with HP shareholders to solicit their support in urging the HP Board to do the right thing and pursue this compelling opportunity.”
The chief executive of Xerox has outlined his roadmap for a hostile takeover of HP after the laptop and printer maker rejected a takeover bid in excess of $30 billion earlier this week.
HP reviewed a takeover proposal first submitted on 7 November, but its CEO declared earlier this week that the bid significantly undervalued the company, and wasn’t in the best interests shareholders. Xerox’s CEO John Visentin has written back to HP to dispute this, suggesting instead the company’s valuation actually represents a huge premium on the target share price set by the firm’s own financial analysts Goldman Sachs.
