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HP & Xerox

HP/Xerox merger update

  • Xerox filed a proxy statement with the SEC to support its slate of nominees for HP’s board of directors,
    • Expanded its board slate from 11 to 12 members, as it added former Alliant Energy CEO, Erroll Davis Jr.
  • Xerox’s CEO, John Visentin, stated that it will pause its public pursuit of HP amid the outbreak of coronavirus
    • Xerox’s shares have fallen 33% over past month
  • HP’s CEO, Enrique Lores, was recently interviewed by CNBC
    • “When we are talking about real overlap with Xerox, we are talking about $2.8 billion from our side and $9 billion in revenues from their side”
    • “even $1 billion in cost-saving synergies is an aggressive number”
    • “HP could effect those $1 billion in cost savings on its own”
    • “current Xerox offer of $24 per share cash and stock deal undervalues HP, creates a very risky capital structure”
    • “we need to make sure that the merged company has the right capital structure and that the synergies are realistic….we need to discuss the best way of putting the two companies together”
    • Also revealed is that HP increased by 50% the payout ($7.2 million) to its CEO if he is fired during takeover by Xerox.
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