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HP Rejects Xerox Takeover Offer Again

HP Inc (HPQ) on Sunday reiterated its rejection of Xerox Holdings Corp.'s (XRX) $33.5 billion cash-and-stock offer for the PC and printer maker, saying that the proposal significantly undervalues the company.

Responding to Xerox's November 21 letter, HP said, "there continues to be uncertainty regarding Xerox's ability to raise the cash portion of the proposed consideration and concerns regarding the prudence of the resulting outsized debt burden on the value of the combined company's stock even if the financing were obtained. Consequently, your proposal does not constitute a basis for due diligence or negotiation."

HP also said it is concerned that Xerox's exit from Fujifilm joint venture earlier this month left a sizeable strategic hole in its portfolio.

HP noted that it has numerous opportunities to create value for HP shareholders on a standalone basis. The company will not let aggressive tactics or hostile gestures distract it from its responsibility to pursue the most value-creating path.

Earlier this month, Xerox had proposed to acquire HP for $22.00 per share, comprising $17.00 in cash and 0.137 Xerox shares for each HP share. But, HP rejected that offer claiming that it significantly undervalues the company.

Following the initial rejection of the offer, Xerox on November 21 had said that its Board would determine to expeditiously pursue its proposed acquisition to completion. Xerox also said then that unless the companies agree on mutual confirmatory due diligence to support a friendly combination by Monday, November 25, Xerox would take its compelling case directly to HP shareholders.

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