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HP reiterates its rejection of Xerox's offer to buy the company

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By Reuters
HP reiterates its rejection of Xerox's offer to buy the company
FILE PHOTO: A Hewlett-Packard logo is seen at the company's Executive Briefing Center in Palo Alto, California January 16, 2013. REUTERS/Stephen Lam   -   Copyright  Stephen Lam(Reuters)

(Reuters) – HP Inc <HPQ.N> reiterated on Sunday its rejection of Xerox Corp’s <XRX.N> $33.5 billion(£26.11 billion) cash-and-stock offer for the company, adding that the proposal “significantly undervalues HP.”

The personal computer maker said last Sunday it rebuffed Xerox’s offer, and that it was open to exploring its own bid for the U.S. printer maker. Xerox had offered HP shareholders $22 per share, involving $17 in cash and 0.137 Xerox share for each HP share, according to a Nov. 5 letter.

“We reiterate that we reject Xerox’s proposal as it significantly undervalues HP,” HP said in a letter to Xerox made public on Sunday.

“There continues to be uncertainty regarding Xerox’s ability to raise the cash portion of the proposed consideration and concerns regarding the prudence of the resulting outsized debt burden on the value of the combined company’s stock even if the financing were obtained,” the letter added.

HP also said it was concerned that Xerox’s exit from Fujifilm’s joint venture earlier this month left a “sizeable strategic hole in Xerox’s portfolio”.

Xerox threatened on Thursday to take its $33.5 billion buyout bid for HP hostile, if the company did not agree to a “friendly” discussion and open its books before Monday.

(Reporting by Rama Venkat in Bengaluru; Editing by Peter Cooney)