Breaking: Xerox considering bid for HP
The Wall Street Journal reports Xerox Corp., fresh off of its divestiture of Fuji Xerox, is now considering using part of its $2.3 billion proceeds to buy rival HP Inc.
Xerox is considering making a cash-and-stock offer for HP, which has a market value of about $27 billion, according to people familiar with the matter. The copier maker’s board discussed the possibility Tuesday, the people said.
There is no guarantee Xerox will follow through with an offer or that one would succeed. HP, which installed a new chief executive just last week, is more than three times the size of Xerox and any bid would be at a premium to its current stock price, the people said.
According the article, Xerox management has already secured an informal funding commitment from a major bank.
HP in early October a restructuring plan would shrink the company by as many as 9,000 people, or 16% of its workforce, and yield annual cost savings of $1 billion.
From a photo imaging industry standpoint, a merger of the two printing platform giants could have a profound effect on the future, as Xerox’s iGen and HP’s Indigo are completely different – yet competitive – platforms. The article states a Xerox/HP merger could bring $2 billion in savings to the combined company, adding further fuel to speculation one or the other platform would win out.
Update: Following the report, HP released a statement, confirmed the receipt of the merger proposal:
…”we have had conversations with Xerox Holdings Corporation 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.
“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.”