Xerox said Tuesday that it is ready to put on the gloves and get in the ring with HP in order to secure its proposed $33.5 billion offer to acquire the longtime Silicon Valley computer and technology leader.
In a letter sent to HP Chief Executive Enrique Lores and Chairman Chip Bergh, Xerox Chief Executive John Visentin said his company intends to “engage directly with HP shareholders” — which is another way of saying it will launch a proxy fight — in order to get enough support to cause the HP board of directors to consider Xerox’s unsolicited acquisition offer. Xerox’s latest letter comes less than two days after HP rejected Xerox’s buyout efforts for a second time.
And based on what Xerox had to say about HP’s thinking, things are starting to get personal between the companies.
“Your refusal to engage in mutual due diligence with Xerox defies logic,” Visentin wrote to Lores and Bergh. “Nevertheless, rather than engage with us in three weeks of customary mutual due diligence, HP continues to obfuscate and make misleading statements.”
Earlier this month, Xerox approached HP with a buyout offer following what had been private talks between the two companies. HP rejected the bid on the grounds that it believed Xerox was undervaluing HP, and “significant questions for us regarding the trajectory of your business and future prospects.” Last week, Xerox gave HP until Monday afternoon to re-assess its opinion on the offer, but HP told Xerox late Sunday that the deal, as it was currently structured, was a no-go for the Palo Alto-based company.
Visentin took issue with HP’s sentiment about Xerox, saying that his company is already outperforming its three-year strategic business plan, and that “there is ‘no hole in Xerox’s portfolio’ due to its selling of its stake in a joint venture to Japanese printing and film giant Fuji for $2.3 billion. Instead, Visentin said that deal as resulted in “significantly more cash to support growth and greater flexibility in our sourcing terms.”
HP said it had no immediate comment on Xerox’s latest communication.
In its most-recent rejection letter, HP cited what it called Xerox’s “aggressive tactics” and hostile gestures” in its acquisition efforts. That was enough to riled up Xerox in its response on Tuesday.
“While you may not appreciate our “aggressive” tactics, we will not apologize for them,” Visentin said. “The most efficient way to prove out the scope of this opportunity with certainty is through mutual due diligence, which you continue to refuse, and we are obligated to require.”
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