Xerox Considers Takeover Offer for HP
Xerox Holdings Corp. has set its sights on a takeover of personal-computer and printer maker HP Inc., an audacious move that would unite two fading stars of technology. Xerox is considering making a cash-and-stock offer for HP, which has a market value of about $27 billion, according to people familiar with the matter. The copier maker’s board discussed the possibility Tuesday, the people said.
There is no guarantee Xerox will follow through with an offer or that one would succeed. HP, which installed a new chief executive just last week, is more than three times the size of Xerox and any bid would be at a premium to its current stock price, the people said.
Working in Xerox’s favor: It expects a $2.3 billion windfall from a deal to sell stakes in joint ventures with Fujifilm Holdings Corp., which was announced Tuesday along with the dismissal of a $1 billion-plus lawsuit filed against Xerox by the Japanese technology company. Xerox has also received an informal funding commitment from a major bank, known as a “highly confident letter,” the people said.
A deal would join two household names with storied pasts that have been scrambling to retool their businesses as the need for printed documents declines. Both companies are in cost-cutting mode and a union could afford new opportunities to shed expenses—to the tune of more than $2 billion, the people said.
Xerox, based in Norwalk, Conn., primarily makes large printers and copy machines and most of its almost $10 billion in annual revenue comes from renting and maintaining them for businesses. HP, based in Palo Alto, Calif., sells mainly smaller printers and printing supplies and is also one of the largest PC makers in the world. It posted revenue of more than $58 billion for its most recent fiscal year, ended in October 2018.
HP is what remains after Hewlett-Packard Co. split off Hewlett Packard Enterprise Co., which sells servers, data-storage gear and related services to corporate clients, in 2015. Before a decline in its printing-supplies business in recent quarters, it had grown faster than expected as a stand-alone company.