HP’s board of directors “unanimously” rejected the “unsolicited” acquisition deal the veteran copy machine maker Xerox offered on Nov. 5, the California-based company said in a statement on Sunday.
“[Our board of directors] has unanimously concluded that [the offer] significantly undervalues HP and is not in the best interests of HP shareholders,” HP told Xerox, according to the statement.
The company said that other factors, such as the “outsized debt levels” the two companies’ combined stock would have, played a role in its decision.
Xerox offered a $33.5-billion buyout deal to HP — a company with a market value three times bigger than the potential buyer's.
The Connecticut-based company offered $22 per share to HP stakeholders, with $17 in cash and the rest in Xerox shares.
HP shareholders would end up owning approximately 48% of the merged company. HP was widely expected to reject the deal as undervaluing the company, the Wall Street Journal reported earlier this month.
HP said it remains open to a merger with Xerox as long as the latter is willing to share diligence information. The company raised concerns over Xerox’s profitability and “future prospects.”
“We recognize the potential benefits of consolidation, and we are open to exploring whether there is value to be created for HP shareholders through a potential combination with Xerox,” HP said in the statement.
HP’s shares closed 0.25% higher at $20.18 on Friday. Xerox closed 0.75% higher at $38.94.
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