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Updated: Xerox secures $24 billion financing for HP takeover bid, HP responses with shrug

The leadership of Xerox Holdings Corp. on Jan. 6 sent a letter to the Board of Directors of HP Inc. confirming it has obtained $24 billion in binding financing commitments from Citi, Mizuho and Bank of America to complete its proposed merger with HP. HP has resisted overtures from Xerox.

In response to the most recent letter, HP again rebuffed Xerox, saying the unwanted suitor had not addressed HP’s key concern that the Xerox’s $34 billion bid “undervalues” HP.

Since mid-November, Xerox management, after settling its long dispute with Fujifilm and spurred on by activist shareholder Carl Icahn, has suggested a combination of the two companies would be in the best interest of shareholders. HP’s board has repeatedly rejected the offers.

The full text of the Xerox letter is as follows:

Dear Chip and Enrique,

Over the last several weeks, we have engaged in constructive dialogue with many of your largest shareholders regarding the strategic benefits of our proposal to acquire HP. It remains clear to all of us that bringing our companies together would deliver substantial synergies and meaningfully enhanced cash flow that could, in turn, enable increased investments in innovation and greater returns to shareholders.

But it also became clear from our dialogue with your shareholders that you and your advisors have been questioning our ability to raise the capital necessary to finance our proposal. 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.

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

Sincerely,

John Visentin
Vice Chairman and CEO
Xerox Holdings Corporation

HP’s response letter is below:

Dear John,

We reiterate that the HP Board of Directors’ focus is on driving sustainable long-term value for HP shareholders. Your letter dated January 6, 2020 regarding financing does not address the key issue – that Xerox’s proposal significantly undervalues HP – and is not a basis for discussion. The HP Board of Directors remains committed to advancing the best interests of all HP shareholders and to pursuing the most value-creating opportunities.

On behalf of the Board of Directors,

Enrique Lores Chip Bergh
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