Channel programs News
The Top 10 News Stories Of 2020 (So Far)
The impact of the COVID-19 pandemic, a steep economic downturn, the IT industry’s response to the social justice movement, an abandoned corporate takeover attempt, a possible spin-off, new technologies and old technology rivalries. It has been a very tumultuous 2020 – so far.
6. Xerox Pursues, Then Abandons Acquisition Bid For HP Inc. In Wake Of Pandemic
In early November 2019 Xerox stunned the industry when it launched an unsolicited bid to buy HP Inc., its leading competitor in the printer market, for $22 per share or $33 billion. HP rejected the Xerox offer on Nov. 24 saying it significantly undervalued the company. Two days later Xerox said it would launch a direct appeal to HP stockholders, asking them to sell their shares to Xerox.
The posturing and financial maneuvering continued through the end of 2019 and into 2020 with Xerox CEO John Visentin making the argument that combining Xerox and HP would create a $66.8 billion printer juggernaut. Xerox threatened to nominate 11 candidates for HP’s board of directors (later adding a 12th), to which HP responded with a shareholder rights plan and a promise to return $16 billion in capital to shareholders over the next three years.
But the COVID-19 pandemic threw a wrench into Xerox’s plans. To stop the spread of the virus regions of the U.S. began shutting down large segments of their economies (a recession officially began in February) and stock markets tumbled. That jeopardized Xerox’s bid to acquire HP because its buyout offer included a combination of cash and Xerox stock – the latter based on the $37.68 closing price of Xerox shares on Feb. 6. On March 9 Xerox stock closed at $27.50.
On March 13 Xerox said it was hitting the pause button on its bid to acquire HP, saying that amid the pandemic and faltering economy the company needed to “prioritize the health and safety of its employees, customers, partners and affiliates over and above all other considerations.”
On March 31, citing the global health crisis and “resulting macroeconomic and market turmoil,” Xerox officially ended its takeover bid saying it was withdrawing its tender offer to buy HP shares and pulling the slate of 12 nominees for the HP board.