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Xerox Scraps HP Takeover, Dumps Board Slate Amid Coronavirus Pandemic

O’Ryan Johnson

‘We are withdrawing our tender offer to acquire HP and will no longer seek to nominate our slate of highly qualified candidates to HP’s Board of Directors,’ Xerox s says in a statement.


Xerox has called off its bid to buy Hewlett Packard, dashing a public and private courtship that had been in the works for more than half a year, citing the coronavirus pandemic.

The Wall Street Journal, which first broke the story in November that Xerox was angling for a minnow-swallows-the-whale, heavily leveraged buyout of the four-times larger HP – reported yesterday that the coronavirus pandemic has finally forced the copier to abandon its effort, citing people familiar with the matter.

In a statement, Xerox blamed its dropped offer on the fallout from the novel coronavirus. The offer was originally comprised of $18.40 in cash and 0.149 Xerox shares for each HP share. The previous offer, made last November, was originally $17 in cash per share and .137 shares of Xerox.

“The current global health crisis and resulting macroeconomic and market turmoil caused by COVID-19 have created an environment that is not conducive to Xerox continuing to pursue an acquisition of HP Inc.,” Xerox said in a statement. “We are withdrawing our tender offer to acquire HP and will no longer seek to nominate our slate of highly qualified candidates to HP’s board of directors.”

Also scrapped was the slate of 12 directors that Xerox had assembled with the hopes of getting them elected by HP shareholders this summer. That personnel was critical as HP’s board had rejected both the $22 per share offer and the $24 per share offer, even when it was backed with $24 billion in financing from Bank of America, Citibank and Mizuho Financial Group Inc.

“While it is disappointing to take this step, we are prioritizing the health, safety and well-being of our employees, customers, partners and other stakeholders, and our broader response to the pandemic, over and above all other considerations,” Xerox said.

HP said in a statement that it is committed to driving value for its shareholders, with a healthy cash position and cash balance.

"Our focus remains on addressing the needs of our ecosystem of stakeholders around the world, ensuring that we build on our strength and resiliency throughout this crisis and position the business for the opportunities ahead," HP said in a statement.

While Xerox mothballed plans to pursue the merger two weeks ago – saying the virus and containment measures made a road trip pitch to HP shareholders unfeasible -- the deal’s failure suggests the company believes the economic conditions around its offer, the much-discussed $2 billion in synergies as well as HP’s distribution power in Asia, will not exist on the other side of the coronavirus pandemic.

Since news of the deal broke on Nov. 5, Xerox has lost $3.7 billion of its value, with the share price tumbling 47.92 percent from $36.37 to $18.94. Xerox’s market cap dropped from $7.73 billion to $4.03 billion in that time.

Meanwhile HP has seen a much gentler loss in value amid the economic upheaval, with shares rallying as consumers and businesses snatched up PCs and monitors to work from home. HP Inc. shares have dropped 5.65 percent from $18.40 to $17.36, for an overall hit to their market cap of $1.49 billion. HP was originally valued at $26.31 billion after the news of the deal was announced and was at $24.82 billion at yesterday’s close.

“There remain compelling long-term financial and strategic benefits from combining Xerox and HP,” Xerox said. “The refusal of HP’s board to meaningfully engage over many months and its continued delay tactics have proven to be a great disservice to HP stockholders, who have shown tremendous support for the transaction.”

Josh Justice, president of Just Tech a Xerox Master Accredited Elite Partner, said that like a lot of Xerox dealers he liked the deal for some of the potential opportunities in combining HP and Xerox products, but he thinks Xerox partners will weather the storm.

“I thought the HP deal made sense,” he told CRN. “But Xerox partners have a lot of great things going for them. I do think there could have been some cool opportunities with Hp that we won’t see now, but while the print side has slowed down, my IT side is booming.”

O’Ryan Johnson

O’Ryan Johnson is a veteran news reporter. He covers the data center beat for CRN and hopes to hear from channel partners about how he can improve his coverage and write the stories they want to read. He can be reached at

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