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Industry

Xerox focuses on HP’s board of directors

In its latest bid to acquire HP, Xerox has revealed plans to overturn its entire board of directors.

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Xerox to nominate full slate of directors at HP’s upcoming annual meeting

Xerox has been unsuccessful thus far in its attempts for either a merger or buy-out. Its plans for a $27bn (£21bn) cash-and-stock offer was unsuccessful with HP claiming this “significantly undervalues” the company.

Its attempts to reassure HP that it was able to follow through with its offer by acquiring $24bn (£18bn) in Binding Financing Commitments was also unsuccessful.

After going directly to HP’s shareholders, the latest development in the two and fro is that Xerox will now nominate a full slate of directors for election.

In a statement, Xerox confirmed that it plans to nominate 11 independent candidates to replace HP’s board of directors at HP’s 2020 Annual Meeting of Stockholders.

Xerox plans to nominate former senor executives from a collection of significant companies such as United Airlines, Hilton Hotels and Aetna.

We believe HP shareholders will be better served by a new slate of independent directors who understand the challenges of operating a global enterprise

According to the statement, the candidates were chosen due to their expertise in overseeing and executing significant company transformations. 

John Visentin, vice chairman and chief executive officer of Xerox, comments: “HP shareholders have told us they believe our acquisition proposal will bring tremendous value, which is why we lined up $24bn (£18bn) in Binding Financing Commitments and a slate of highly qualified director candidates.

“We believe HP shareholders will be better served by a new slate of independent directors who understand the challenges of operating a global enterprise and appreciate the value that can be created by realising the synergies of a combination with Xerox.”

HP is currently made up of an independent board, including an independent chairman and ten of 12 independent directors. The company’s current and former chief executive officers make up the final two.

HP has rejected all of Xerox’s propositions thus far

In response to Xerox’s announcement, HP has issued a statement in which it describes the plans as a “self-serving tactic by Xerox to advance its proposal”. HP maintains that the offer “significantly undervalues” the company and adds that it creates “meaningful risk to the detriment of HP shareholders”.

The company also expresses the view that the nominations have been influenced by Carl Icahn who has a large ownership position in Xerox.

The statement says: “[This] means that his interests are not in aligned with those of other HP shareholders. Due to Mr Icahn’s ownership position, he would disproportionately benefit from an acquisition of HP by Xerox at a price that undervalues HP.”

In terms of what will happen now, HP is reviewing the nominations and has says it will respond “in due course”.

The date of the meeting has not been announced as of yet, and the company has said that its shareholders do not need to take any action at this time.


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