The gloves are off again in Xerox’s battle to acquire HP Inc.
Xerox Holding Corp. on Thursday announced it intends to nominate 11 people to replace HP’s board of directors at HP’s 2020 Annual Meeting of Stockholders, which not yet been scheduled.
The nominees, who Xerox says hail from the C-suite, possess financial and operational experience on a global scale across numerous industries, and include current or former board members from Ally Financial, American Airlines, Cognizant Technologies, Jefferies, Wynn Resorts, among other businesses.
“HP shareholders have told us they believe our acquisition proposal will bring tremendous value, which is why we lined up $24 billion in binding financing commitments and a slate of highly qualified director candidates,” said John Visentin, vice chairman and CEO at Xerox. “We believe HP shareholders will be better served by a new slate of independent directors who understand the challenges of operating a global enterprise and appreciate the value that can be created by realizing the synergies of a combination with Xerox.”
HP fought back with the following statement:
“We believe these nominations are a self-serving tactic by Xerox to advance its proposal, that significantly undervalues HP and creates meaningful risk to the detriment of HP shareholders.
The HP Board of Directors is committed to serving the best interests of all HP shareholders and to pursuing the most value-creating path. Value creation for HP shareholders is not dependent on a Xerox combination. There are numerous opportunities available to HP to drive sustainable long-term value. These include the execution of HP’s strategic plan, and the deployment of its strong balance sheet for increased share repurchases of its significantly undervalued stock, and for value-creating M&A. Xerox’s proposed transaction attempts to use HP’s financial capacities for the benefit of Xerox shareholders.
We believe that Xerox’s proposal and nominations are being driven by Carl Icahn, and his large ownership position in Xerox means that his interests are not aligned with those of other HP shareholders. Due to Mr. Icahn’s ownership position, he would disproportionately benefit from an acquisition of HP by Xerox at a price that undervalues HP.
Mr. Icahn has meaningful influence over Xerox and its Board of Directors given this ownership position; the role he played in the appointment of Xerox’s current CEO, who is a former Icahn consultant; and the ties Mr. Icahn has to members of the Xerox Board, including Xerox’s Chairman, an Icahn employee.
The HP Board is unwavering in its commitment to HP shareholders and will continue to take all appropriate actions to advance and protect HP shareholders’ best interests.”
In HP’s public statement, the company also defended the world-class quality of its directors, and their individual and collective skills across finance and accounting, government and public affairs, scientific research, product development and issues management, corporate governance and international business in key regions where HP operates around the world.
According to an article in The Street, Xerox, reportedly bought a small HP stake, giving it the right to nominate directors for elections to be held at the companies annual meeting this summer. The deadline for nominations to HP’s board is Friday.
The Xerox first approached HP about an acquisition in November and since the first rejection the business deal has become increasingly acrimonious.
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