HP Inc. (HPQ) - Get Report shares slipped lower Monday after the personal computer maker rejected a potential $32 billion takeover bid from Xerox Holding Co. (XRX) - Get Report while noting it was "open to exploring" a potential tie-up with its smaller rival.

HP said Xerox's offer of $22 a share, put to the board on November 5, "significantly undervalues" HP and is not in the best interests of shareholders, citing Xerox's high debt levels and business prospects. HP did, however, leave a window open for future negotiations if it was able to gain access to information on Xerox and engage with group management. 

"We recognize the potential benefits of consolidation, and we are open to exploring whether there is value to be created for HP shareholders through a potential combination with Xerox," HP said in a letter to the Xerox board that was subsequently emailed to TheStreet. "However, as we have previously shared in connection with our prior requests for diligence, we have fundamental questions that need to be addressed in our diligence of Xerox."

"With substantive engagement from Xerox management and access to diligence information on Xerox, we believe that we can quickly evaluate the merits of a potential transaction," the letter added. "We remain ready to engage with you to better understand your business and any value to be created from a combination."

HP shares were marked 0.30% lower at the start of trading Monday to change hands at $20.13 each, although the stock has gained around 20% over the past month, giving the group a market value of around $30 billion, as speculation mounted that its smaller rival might mount a leveraged takeover play. 

Xerox shares, meanwhile, were marked 0.5% lower at $38.74 each, trimming their past-month gain to around 28% after testing the highest level in more than five years with a market value of around $8.42 billion.

Earlier this month, CNBC reported that Xerox mulled a $22 per share takeover, with a mix of 77% cash and 23% in stock, that would have valued the personal computer maker at around $32.6 billion.

HP said at the time it had "great confidence" in its multi-year strategy in an evolving industry, but noted the Xerox approach with caution.

TheDeal, a former sister publication of TheStreet, reported in April 2018 that HP had made an informal approach towards buying Xerox as it was in the final throes of its abandoned $2.3 billion merger with Japan's Fujifilm.

A January 2018 inquiry was for Xerox was revealed in an amended complaint issued by Xerox's third largest shareholder at the time, Darwin Deason, who had litigation pending in an attempt to block the Fuji-Xerox deal.

The complaint alleged that Jacobson told an unnamed potential bidder that he needs to move quickly and "essentially discouraging him from making an offer". TheDeal said that, according to people familiar with the situation, the unnamed possible bidder noted as unnamed in the complaint was HP Inc.