Xerox ups offer in hostile HP bid

The battle between print giants Xerox and HP for control of HP has reached new heights, with Xerox upping its offer to HP shareholders by 9 per cent, and saying it will launch a tender offer on 2 March.

Xerox is now offering US$24 a share to HP stockholders, up from US$22. Xerox says the cash and share offer equates to a 41 per cent uptick in the value of HP stock. Analysts though said the revised offer eats into the Xerox story to HP shareholders of the combined entity extracting costs.

HP is making no comment on the latest attempt by Xerox to win over its shareholders until its 24 February first quarter webcast.

Stock price of HP rose by 4 per cent on the revised Xerox bid, but lost almost all of that by the end of the day. The Xerox share price rose by 1.5 per cent.

Xerox says it has had multiple conversations with major HP shareholders, and claims “they want the enhanced returns, improved growth prospects and best-in-class human capital that will result from a combination of Xerox and HP. The tender offer announced today will enable these stockholders to accept Xerox’s compelling offer despite HP’s consistent refusal to pursue the opportunity.”

The HP board has not yet responded to the new offer, but has previously rebuffed all Xerox attempts to buy the company, essentially saying the move is driven by billionaire investor Carl Icahn and designed to enrich him further, it said his interests were 'not aligned' with the best interests of the business.

Icahn owns 11 per cent of Xerox and 4 per cent of HP, and is the man who blocked Fujifilm’s ambitions for Xerox. Known as an activist investor – corporate raider in old language – the 83-year-old Icahn has amassed a US$17bn fortune from a 40-year career in corporate financing.