Xerox provided an update on their bid to takeover HP, one of the leading companies in 3D printing today. 

Xerox Hostile HP Takeover

For reasons not understood by everyone, Xerox has been pursuing a takeover of HP for over a year. Their strategy is hostile, meaning they wish to acquire a majority of the shares of HP regardless of whether HP’s board of directors endorses the move or not. And they don’t.

Xerox is in fact a much smaller company than HP, and thus it is strange they would attempt such a move. However, it seems they likely have outside backing that could fund the bid to acquire the required number of shares. 

Recently we published an interview with industry expert Pete Basiliere on the topic, where he speculated on the benefits of joining the two giants together, saying: 

“Carl Icahn, the investor who is driving the idea of Xerox acquiring HP, sees $2 billion in synergies as well as market gaps in each company’s offer that can be plugged with the other company’s products and services.”

Xerox HP Announcement

However, that’s all changed with an announcement from Xerox, which says: 

“The current global health crisis and resulting macroeconomic and market turmoil caused by COVID-19 have created an environment that is not conducive to Xerox continuing to pursue an acquisition of HP Inc. Accordingly, we are withdrawing our tender offer to acquire HP and will no longer seek to nominate our slate of highly qualified candidates to HP’s Board of Directors.”

Does Xerox feel that the crisis has changed the conditions regarding the takeover, such that they will not re-ignite the move in the future? They also say: 

“There remain compelling long-term financial and strategic benefits from combining Xerox and HP. The refusal of HP’s Board to meaningfully engage over many months and its continued delay tactics have proven to be a great disservice to HP stockholders, who have shown tremendous support for the transaction.”

It seems they still believe in the takeover, but it may be that their financing behind the scenes has diminished, possibly due to the ongoing crisis. They do thank the “significant backing” they received from “the banks” during the process, “even during the market turmoil caused by COVID-19.” 

Based on the announcement it appears they are, at least for the moment. However, that could change in the future as conditions are always moving and companies must always adapt their strategies.

Via Xerox