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HP Vs. Xerox: 4 Key Financial Metrics In The Takeover Fight

We take a look at the financials that are playing a central role in Xerox's bid to acquire rival HP.

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Metrics To Watch

Xerox leadership says it has an assurance of financing from Citi to pay for its proposed $33.5 billion takeover of HP Inc. And now, Xerox CEO John Visentin is threatening a proxy fight to push forward the merger of the two companies following the rejection of the Xerox proposal by HP's board on Sunday. But what Xerox hasn't mentioned is that it's most likely the strength of HP's balance sheet and free cash flows that is making the merger feasible.

An analysis of Xerox's offer published by Bloomberg columnist Alex Webb found that the debt that would be used to finance the acquisition would likely be secured against HP's free cash flow--while HP's relatively small amount of debt is another crucial piece. "HP’s low debt is the reason Xerox could think of a takeover to begin with," Webb wrote.

With Xerox not backing down from its takeover attempt, we took a look at some of the key financial differences between the businesses of HP Inc. and Xerox. What follows are four financial metrics that are at the center of the HP-Xerox takeover fight.

 
 
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