Xerox Says It’s Obtained Financing for HP Inc. Acquisition
With the holidays over, Xerox doesn’t appear to be wasting any time pursuing its acquisition of HP. To that end, the company reported today that it had lined up $24 billion in binding loan commitments from Citi, Mizuho and Bank of America to acquire HP Inc. The HP Inc. board and management has so far resisted becoming acquired by Xerox, and in return, Xerox is now appealing directly to HP shareholders.
As of December 25, 2019, investor Carl Icahn, Xerox’s majority investor, who is the fifth largest shareholder in HP, now has the opportunity to nominate directors to HP’s board of directors. If approved, such directors would likely be loyalists to Icahn and would approve a Xerox acquisition of HP.
In a letter to HP Inc. Board Chairman Chip Bergh and HP Inc. CEO and President Enrique Lores, Xerox CEO and Vice Chairman John Visentin stated that HP shareholders have stated that they have been concerned with Xerox’s financing ability. Thus, “…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.”
The full text of the letter to HP’s Bergh and Lores is as follows:
“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.
Vice Chairman and CEO
Xerox Holdings Corporation
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- November 2019: HP and Xerox – Now What?
- November 2019: HP Rejects Xerox Buy-Out Offer
- November 2019: This Week in Imaging: Why Xerox Probably Won’t Be Acquiring HP