Not in the best interests of company says HP board.

The board of California-based HP Inc. has rejected a takeover offer from Xerox, stating its “significantly undervalues HP and is not in the best interests of HP shareholders.”

In a letter to Xerox CEO John Visentin, the HP board said: "Our board of directors has reviewed and considered your unsolicited proposal dated 5 November, 2019 at a meeting with our financial and legal advisors and has unanimously concluded that it significantly undervalues HP and is not in the best interests of HP shareholders. In reaching this determination, the board also considered the highly conditional and uncertain nature of the proposal, including the potential impact of outsized debt levels on the combined company’s stock.

“We recognise the potential benefits of consolidation, and we are open to exploring whether there is value to be created for HP shareholders through a potential combination with Xerox. However, as we have previously shared in connection with our prior requests for diligence, we have fundamental questions that need to be addressed in our diligence of Xerox. We note the decline of Xerox’s revenue from US$10.2 billion to US$9.2 billion (on a trailing 12-month basis) since June 2018, which raises significant questions for us regarding the trajectory of your business and future prospects.”

HP is worth around US$29 billion and is more than three times the size of Xerox in terms of market capitalisation.

HP announced in October that it will cut between 7000 and 9000 jobs by the end of fiscal 2022 as part of a broader restructuring plan that it estimates will save US$1 billion a year. The cuts would amount to nearly 16% of its 55,000 employees across the world.
 

Japanese firm looking for total control of Pentel

Major Japanese stationery manufacturer Kokuyo has announced it aims to take a majority stake in Pentel, in which it currently holds a 37 per cent stake.

Kokuyo believes that the combined company would be better placed in the domestic Japanese market, as well as increase its presence overseas. Kokuyo’s international sales are 10 per cent of its total sales, compared to 60 per cent for Pentel.

A cautious Pentel said that it was examining the contents of the announcement.