Xerox’s hostile bid to buy HP has moved up a gear with HP’s board once again sternly rejecting the takeover offer.

 

In a follow-up letter to Xerox CEO John Visentin, the HP board said the company's proposal "significantly undervalues HP."

 

"We believe it is important to emphasize that we are not dependent on a Xerox combination," the HP board wrote in its letter. "It is clear in your aggressive words and actions that Xerox is intent on forcing a potential combination on opportunistic terms and without providing adequate information."

 

The letter was sent in response to Visentin's latest attempt to push HP toward accepting the bid, which values HP at US$33.5 billion. That figure is more than HP's market capitalisation of $30 billion, which already makes the company more than three times the size of Xerox.

 

HP, formerly known as Hewlett-Packard, first rejected the offer earlier this month.

 

The HP board dismissed that "hostile approach" in its letter, and called out what it identified as "significant concerns" about Xerox's business. It pointed out that Xerox's revenue has fallen nearly 10 per cent in the past year.

 

HP's board also said it was concerned about Xerox's decision to sell its stake in a joint venture with Fujifilm, adding that the exit leaves a "sizeable strategic hole" in Xerox's business.

 

"We have concerns as to the state of Xerox's technology resources, research and development pipeline, future product programs, and supply continuity and capability," the directors wrote, adding that Xerox would also have to get access to "the fastest growing Asia Pacific region."

 

Analysts believe a marriage between the companies could make sense. Both Xerox and HP spun off their big money-making ventures in recent years, leaving behind aging printing businesses that remain profitable. But those earnings are dwindling every year.