Xerox Holdings Corp (NYSE:XRX) is putting pressure on HP Inc (NYSE:HPQ) to takeover forcefully. The company threatened HP to take the HP Inc (NYSE:HPQ)e confidence of the shareholders to acquire a much larger firm. Xerox said it nominated 11 people to replace on the HP board in its latest attempt to bend HP to its fold and merge with it.
Plans to sack the entire board of HP
In its latest fight to get control of HP, Xerox said it will replace the entire board in April 2020’s shareholder’s meeting. It is the same board that rejected the takeover bid of $34 billion by Xerox. In a communication to Techcrunch, HP said it is the gimmick of XEROX and undervalues HP and detriment its shareholders.
According to some people, who are associated with this news, XEROX is making an unsolicited takeover bid with just $33 billion to acquire the printer and computer maker. In recent weeks, XEROX acquired a small take in HP. They said XEROX is making efforts to nominate directors for HP at a shareholder meeting in April 2020. However, XEROX has not finalized the list, with Friday being the deadline for HP board nominations.
XEROX is playing a game to negotiate a deal with HP by putting pressure. The company may put up the proposal to the shareholders at a meeting in April and install directors to support the takeover bid.
HP blames Carl Icahn
HP has blamed Carl Icahn, who is a shareholder of XEROX, for his continued efforts to get control over it. According to a communiqué from HP, Carl is at the back of XEROX for the nominations to its board and the proposed takeover bid. Carl would benefit a lot from the takeover by undervaluing HP. He also owns a larger stake in HP. Carl owns a stake of 11% in XEROX.
Both HP and XEROX exchanged harsh letters in November 2019. HP said XEROX does not have sufficient funds to purchase a much larger company. In early January 2020, XEROX said it already mobilized $24 billion for the takeover. But, HP is not believed XEROX and said the bid is very low. XEROX argues that the combination would help to tackle industry-wide decline and achieve annual savings of $2 billion.
The market value of XEROX is just $8 billion when compared to HP, whose market cap is $32 billion.