U.S. printer manufacturer Xerox Holdings walked away from its $35 billion hostile cash-and-stock offer for HP on Tuesday after the coronavirus pandemic put a burden on its campaign to acquire the PC and printing equipment producer.
Xerox’s resolution came after it said earlier this month it could cancel meetings with HP shareholders to focus on coping with the coronavirus outbreak
It represents a triumph for HP CEO Enrique Lores, who faced an acquisition battle as soon as he took over the helm of the Palo Alto, California-based firm in November, and a beating for Xerox CEO John Visentin, a former Hewlett-Packard and IBM executive with connections to the private equity trade who took over as Xerox CEO in 2018.
It is also a blow for billionaire investor Carl Icahn, who owns considerable stakes in both firms and had pushed for the acquisition
Xerox was set to challenge HP’s board at the latter’s annual meeting of shareholders in May; however, it will now desert this effort as well as its tender offer for HP’s shares, the corporate mentioned in a statement.
Xerox added that there were compelling long-term financial and strategic advantages in a potential acquisition. While the businesses may opt to engage once the coronavirus disaster subsides, Xerox’s decision means that it will not get another chance to place such pressure on HP until its next annual shareholder meeting in spring 2021.