Xerox Secures $24 Billion in Committed Financing for Potential HP Takeover

HP rejected the November proposal from Xerox, saying the $22-a-share deal price significantly undervalued the company.
Publish date:

Xerox  (XRX) - Get Report said it secured $24 billion in financing for its proposed $33.5 billion bid for HP. Inc.  (HPQ) - Get Report

In a letter to HP's board, the Norwalk, Conn., imaging-technology provider said Citi, Mizuho and Bank of America agreed to provide the financing for the deal. 

Xerox said that it has been in contact with HP’s largest shareholders, who have expressed concern that Xerox -- the smaller of the two companies – would have trouble swallowing its Palo Alto, Calif., counterpart.

“We have always maintained that our proposal is not subject to a financing contingency, but in order to remove any doubt, we have obtained binding financing commitments (that are not subject to any due diligence condition) from Citi, Mizuho and Bank of America,” Xerox CEO John Visentin wrote in the letter. 

“My offer stands to meet with you in person, with or without your advisors, to begin negotiating this transaction.”

In November, HP rejected a $22-a-share, or $33.5 billion, bid from Xerox because it said the proposal significantly undervalued the company. 

HP also said the company's "aggressive words and actions" suggested it aimed to pursue a hostile takeover rather than a "more productive" path that would combine the companies.

Xerox countered by stating that the "potential benefits of a combination between HP and Xerox are self-evident. 

"Together, we could create an industry leader -- with enhanced scale and best-in-class offerings across a complete product portfolio -- that will be positioned to invest more in innovation and generate greater returns for shareholders.”

Xerox shares at last check were down 0.7% to $36.20 while HP shares were up 1.1% to $20.77.