HP Cranks UP Fight With Xerox
Printer company HP is promising investors billions of dollars to counter a hostile takeover bid by smaller printer rival Xerox.
HP says all investors have to do to get the big bucks is reject the Xerox deal. HP told investors Xerox’s offer was a “flawed value exchange” that would lead to an “irresponsible capital structure” that was being sold on “overstated synergies.”
It also told investors that, if they allow HP to stay independent, they will reap about US$16 billion worth of “capital return” between its fiscal 2020 and fiscal 2022.
According to the company, the figure represents approximately 50 percent of HP’s current market capitalisation.
The return would include boosting the company’s share repurchase program to $15 billion, up from $5 billion previously. HP also intends to repurchase at least $8 billion of HP shares over 12 months after its fiscal 2020 meeting and raise its target long-term return of capital to 100 percent of free cash-flow generation.