Citing the escalating COVID-19 pandemic, Xerox said on Friday that it's hitting the pause button on its pursuit to acquire HP. The company is still moving forward with its tender offer and proposed board slate, but said that the focus is now on the health of its employees, customers and channel partners.
"As we closely monitor reports from government and healthcare leaders across the globe and work with colleagues in the business community to minimize the spread and impact of the virus, we believe it is prudent to postpone releases of additional presentations, interviews with media and meetings with HP shareholders so we can focus our time and resources on protecting Xerox's various stakeholders from the pandemic," said Xerox CEO John Visentin.
While Xerox said the market declines due to novel coronavirus didn't influence the decision, both Xerox and HP shares have been hammered along with the broader market.
Earlier this month Xerox officially launched a tender offer to acquire HP, offering $24.00 per share, or $18.40 in cash and 0.149 Xerox shares for each HP share. The tender offer is an increase above Xerox's initial proposal and aligns with HP's market value of $27 billion.
In November, HP's board unanimously rejected the original Xerox bid, arguing that the offer significantly undervalued HP and was not in the best interest of its shareholders. By January Xerox announced that it had secured $24 billion of binding financing commitments to support its proposed combination with HP.
HP quickly shot down the funding commitment, saying it was irrelevant because Xerox's buyout offer was still too low. Xerox then vowed to overthrow HP's existing board via shareholder vote, and then increased its buyout offer to $24.00 per share.