Xerox secures $24 billion financing for proposed HP takeover

08 Jan 2020

1

Xerox Holdings Corp (XRX.N) said on Monday it has secured $24 billion in financing for its $33.5 billion takeover offer for HP Inc (HPQ.N), a deal that the personal computer maker is opposing.

HP rejected the $22 per share offer in November saying it “significantly” undervalued the company, following which the printer maker took the offer directly to HP’s shareholders.
Xerox Holdings Corporation on Monday sent a letter to the board of directors of HP Inc confirming that it has obtained $24 billion in binding financing commitments from Citi, Mizuho and Bank of America to complete its combination with HP.
Xerox said the combination would deliver substantial synergies and meaningfully enhanced cash flow that could, in turn, enable increased investments in innovation and greater returns to shareholders.
Xerox has engaged in “constructive dialogue” with many of HP’s largest shareholders, the company’s chief executive officer, John Visentin, said in a letter addressed to HP’s board on Monday.
Pointing to the strategic benefits of the merger proposal and the support extended by some major shareholders, Visentin said. “My offer stands to meet with you in person, with or without your advisors, to begin negotiating this transaction.” 
Activist investor Carl Icahn, who has a 4.2 per cent stake in HP and a 10.9 per cent stake in Xerox, in December urged HP shareholders who agreed with a merger with Xerox to reach out to the PC maker’s directors for immediate action.
HP had said it was open to exploring a bid for Xerox, stating that it recognizes the potential benefits of consolidation.
HP’s shareholders and advisors have been questioning Xerox’s ability to raise capital necessary to finance the proposal. The binding financing commitments (that are not subject to any due diligence condition) from Citi, Mizuho and Bank of America, will help remove all such doubts, Xerox stated in its letter to HP board.
Citi is acting as Xerox’s financial advisor, and King & Spalding LLP is providing legal counsel to Xerox. Willkie Farr & Gallagher LLP is providing legal counsel to Xerox’s independent directors.
Simpson Thacher & Bartlett LLP is acting as legal counsel to Xerox in connection with the financing for the proposed acquisition of HP, and Cravath, Swaine & Moore LLP is acting as legal counsel to the financial institutions providing the financing.

Business History Videos

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more