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Xerox Holding Corp.  (XRX) shares extended gains Thursday, rising to the highest level in more than five years, after reports suggested the printer and computer focused tech group would be prepared to pay more than $32.5 billion for HP Inc. (HPQ)

CNBC reported that Xerox is mulling an approach priced at $22 per share, with a mix of 77% cash and 23% in stock, to personal computer maker HP, following a raft of market speculation Wednesday linking the two groups in a proposed tie-up. HP said yesterday it had "great confidence" in its multi-year strategy in an evolving industry, but noted the Xerox approach with caution.

"We have had conversations with Xerox from time to time about a potential business combination. We have considered, among other things, what would be required to merit a transaction. Most recently, we received a proposal transmitted yesterday," HP said. "We have a record of taking action if there is a better path forward and will continue to act with deliberation, discipline and an eye towards what is in the best interest of all our shareholders."

Xerox shares were marked 2% higher at the start of trading Thursday at $38.44 each, a move that extends the stock's one-month gain past 29% and takes it to the highest level in more than five years with a market value of around $8.33 billion.

That figure, however, is about four times less than the reported takeover price for HP, which was marked 0.3% higher at $19.63 each, giving it a market value of just over $29 billion.

"We remind investors that at each firm's respective core, Xerox is an enterprise copier company while HP is an enterprise and small & medium business printer company," said Loop Capital analyst Ananda Baruah. "Additionally, as each company has initiatives to expand into the other's core market, the core portfolios fit well together."

"Also, Xerox's most prominent current growth strategy is expansion into SMB for copiers, which is serviced by the IT distribution channel, and HPQ has a very prominent presence here."

Curiously, 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.