Xerox abandons $35 bn hostile bid for HP over Covid-19 outbreak: Report

Xerox Holdings Corp decided on Tuesday to abandon its $35 billion hostile cash-and-stock bid for HP Inc after the coronavirus outbreak put the brakes on its takeover campaign, according to people familiar with the matter.

The decision came after Xerox said earlier this month it would postpone meetings with HP shareholders to focus on coping with the coronavirus pandemic. It is a blow to billionaire investor Carl Icahn, who owns big stakes in both companies and had pushed for their merger.

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Xerox's board concluded that pursuing the takeover without having access to HP's books, so that it could assess the impact of the coronavirus pandemic on HP's business, would be too risky, the sources said.

Xerox was set to challenge HP's board at the latter's annual meeting of shareholders in May, but will now abandon this effort as well as its tender offer for HP's shares, the sources added, requesting anonymity ahead of an official announcement.

The Wall Street Journal first reported on Xerox's decision. Xerox and HP did not immediately respond to requests for comment.

Xerox pauses HP hostile takeover, proxy fight amid virus outbreak

Xerox Holdings said it will pause its public pursuit of HP Inc amid the outbreak of the coronavirus.

“Xerox needs to prioritise the health and safety of its employees, customers, partners and affiliates over and above all other considerations, including its proposal to acquire HP,” Xerox Chief Executive Officer John Visentin said in a statement Friday, adding that the company continues to monitor the situation closely.

Norwalk, Connecticut-based Xerox intends to continue its pursuit of HP when the pandemic stabilises, according to a person familiar with the matter, who asked to not be identified because the matter isn’t public. A representative for HP was not immediately available for comment.

Xerox offered to acquire the much larger HP for $24 a share in cash and stock, or roughly $35 billion, in a hostile takeover. It has also nominated a slate of directors to replace the company’s board. HP has repeatedly rebuffed its efforts, arguing the takeover price undervalues the company and has raised other issues with the proposal.

The printer maker said it would be forced to take a break from its hostile takeover and proxy fight in the wake of the pandemic.

“We believe it is prudent to postpone releases of additional presentations, interviews with media and meetings with HP shareholders so we can focus our time and resources on protecting Xerox’s various stakeholders from the pandemic,” Visentin said.

Dealmaking across the world is being hampered by the spread of the coronavirus. The volume of M&A announced through the end of February was down 27 per cent to $419 billion, the slowest start to a year since 2013, according to data compiled by Bloomberg.