HP on Sunday rejected Xerox’s offer of $22 per share, saying it undervalued the company and that it was open to exploring a bid for the U.S. printer maker.
“Xerox will take its compelling case to create superior value for our respective shareholders directly to your shareholders,” the company said in a letter to HP’s board.
HP did not immediately respond to a request for comment.
Xerox said there will be no financing condition to the completion of its acquisition of HP.
“We are confused by this reasoning in that your own financial adviser, Goldman Sachs & Co, set a $14 price target with a ‘sell’ rating for HP’s stock after you announced your restructuring plan,” Xerox wrote in its letter. The median price target on HP stock by 15 analysts is $20.
Many analysts have said there is merit in the companies combining to better cope with a stagnating printing market, but some cited challenges to integration, given their different offerings and pricing models.
Xerox made the offer for HP, a company more than three times its size, on Nov. 5, after it resolved a dispute with its joint venture partner Fujifilm Holdings Corp (4901.T) that represented billions of dollars in potential liabilities.
Activist investor Carl Icahn, who took over Xerox’s board last year together with fellow billionaire businessman Darwin Deason, said in an interview with the Wall Street Journal last week that he was not set on a particular structure for a deal with HP, as long as a combination is achieved. Icahn has also amassed a 4% stake in HP.
Reporting by Supantha Mukherjee in Bengaluru; Editing by Anil D'Silva