Xerox has been aggressively pursuing an acquisition of HP's business for the past few months, and HP has continually refused to be acquired on Xerox's terms. In light of the pushback, Xerox already proposed a full replacement of HP's Board of Directors, nominating a slate of independent directors that it believes would be more likely to see the value of the proposal.
Last month, Xerox said it planned to make a tender offer for HP's outstanding shares, and today, it did exactly that. The tender offer values HP at $24 per share, $18.40 of which are in cash, and the remaining being equivalent to 0.149 Xerox shares for each HP share. With the offer, HP shareholders would get $27 billion in immediate cash, in addition to then owning a portion of Xerox shares.
John Visentin, CEO and vice-chairman of Xerox, commented on the proposal:
“Our proposal offers progress over entrenchment (...). HP shareholders will receive $27 billion in immediate, upfront cash while retaining significant, long-term upside through equity ownership in a combined company with greater free cash flow to invest in growth and return to shareholders.”
Xerox also announced that it has also gathered financing support from more entities, including MUFG, PNC, and Crédit Agricole, in addition to Bank of America, Citi, and Mizuho, who had already committed $24 billion to help the business go through. The financing amount hasn't increased, but it's now backed by more agencies.
Xerox's offer is on the table until April 21, 2020, at 5PM Eastern Time, but Xerox says the deadline can be extended. This should be just in time for HP's annual shareholder meeting, which was at the end of April last year.