Citing the growing threat of the novel coronavirus to its "various stakeholders," Xerox (NYSE:XRX) indicated today that it is putting its hostile takeover attempt of rival computer and printer maker HP Inc. (NYSE:HPQ) on the back burner for the time being.
"In light of the escalating COVID-19 pandemic," advised CEO John Visentin, "Xerox needs to prioritize the health and safety of its employees, customers, partners and affiliates over and above all other considerations, including its proposal to acquire HP."
The company further noted that "Xerox does not consider the market decline since the date of its offer or the temporary suspension of trading in HP shares that occurred on March 10, 2020, and March 12, 2020, as a result of marketwide circuit breakers procedures to constitute a failure of any condition to its offer to acquire HP." Xerox added that it "will take the same view on any future temporary trading halts, unless otherwise stated in advance," implying that Xerox may be merely suspending its pursuit of HP, and not abandoning the chase entirely.
Xerox did not address HP's "poison pill" plan, announced in February, which permits HP shareholders to buy additional shares at a discount in the event a would-be acquirer (such as Xerox) purchases more than a 20% stake in the company. Nor did Xerox mention HP's counteroffer to HP shareholders, to sell their shares back to HP, rather than tendering them to Xerox in exchange for cash and shares.
Nor did Xerox mention that HP's most recent March 5 statement on the hostile takeover, issued earlier this month, and stating that Xerox's takeover offer "meaningfully undervalues HP" and "unanimously" recommending that HP shareholders not tender their shares to Xerox.