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5 Things To Know About HP's Shareholder Rights Plan

HP has adopted a plan that could make a hostile takeover by Xerox more difficult while giving its shareholders greater protections.

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HP vs. Xerox

With its shareholder rights plan to battle Xerox's acquisition bid, HP Inc. is taking a page from Netflix, circa 2012. That year, Netflix adopted a stockholder rights plan as a response to increased share buys from activist investor Carl Icahn--and Netflix ultimately was never bought out. Now, with HP facing a hostile takeover bid from Icahn-backed Xerox, HP has adopted a shareholder rights plan that reads very similarly to Netflix's 2012 plan.

The move by HP comes after Xerox said it will ask all HP shareholders to sell their shares through a tender offer, starting "on or around" March 2. To help entice shareholders, Xerox also said it will raise its takeover offer to $24 a share, from $22 a share previously. The new offer amounts to a $34.9 billion acquisition bid for HP, up from $32 billion originally.

HP's board of directors has repeatedly rejected the takeover deal since it was first proposed by Xerox in November. "As we have previously said, we are very concerned about Xerox’s aggressive and rushed tactics, and any process that is not based on full information is a threat to our shareholders," said the chair of the board, Chip Bergh, in a news release Thursday.

What follows are five key things to know about HP's shareholder rights plan.

 
 
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