(RTTNews) - Xerox Holdings Corp. (XRX), which has offered to acquire PC and printer maker HP Inc. (HPQ) in $33.5 billion deal, on Thursday said its Board is determined to expeditiously pursue its proposed acquisition to completion after HP rejected the offer. The company also strongly encouraged HP's Board of Directors not to sanction further delay in light of their extensive discussions to date.
Xerox had proposed to acquire HP for $22.00 per share, comprising $17.00 in cash and 0.137 Xerox shares for each HP share. HP rejected the offer claiming that it significantly undervalues the company.
In a letter sent to HP Board, Xerox now said that it is very surprised and confused of the rejection as HP's own financial advisor, Goldman Sachs & Co., set a $14 price target with a "sell" rating for HP's stock after the company announced its restructuring plan on October 3, 2019. Xerox said its offer represents a 57% premium to Goldman's price target and a 29% premium to HP's 30-day volume weighted average trading price of $17.
Xerox also said its offer is neither "highly conditional" nor "uncertain" as HP stated. Also, there will be no financing condition to the completion of its acquisition of HP.
John Visentin, Xerox Vice Chairman and CEO, said, "While we are glad to see that HP's Board of Directors acknowledges the substantial merits of a business combination between Xerox and HP and are open to exploring the value opportunity for our respective shareholders, your response lacks a clear path forward. You have requested customary due diligence, which we have accepted, but you have refused to agree to corresponding due diligence for Xerox."
Xerox further said that unless the companies agree on mutual confirmatory due diligence to support a friendly combination by Monday, November 25, Xerox will take its compelling case directly to HP shareholders.
In the after hours trading on NYSE, HP shares gained 1.22 percent to trade at $19.89.