HP board takes action to try and block Xerox's takeover attempt
HP is trying to fight a hostile takeover offer from Xerox by adopting a shareholder rights plan. On Thursday, HP said that its Board of Directors adopted the plan, which it said “Guards against coercive tactics” to gain control of the company without paying all shareholders an appropriate premium.
HP’s statement said that its board is focused on creating long term value for its shareholders and it wants to make sure they have sufficient time when considering an offer from Xerox. HP officials said that they are concerned “about Xerox’s aggressive and rushed tactics.”
HP said that the plan it has adopted will not prevent a combination of HP with another business, but should encourage Xerox (or anyone else seeking to acquire the Company) to negotiate with the Board prior to attempting to impose a deal that is not in the best interests of the HP shareholders.
Adoption of the shareholder rights plan comes as HP prepares to release more information on February 24 about its plan to drive long-term value for its shareholders.
Xerox recently raised its offer to acquire HP by $2 to $24 per share. Previously, HP has rejected Xerox’s offer, saying it undervalues the company. HP officials also questioned the health of Xerox’s business.
On Friday, Xerox released this statement in response to HP's latest action:
“The HP board clearly adopted a poison pill because our offer is receiving overwhelming support from their shareholders. Regardless of what the company and its army of advisors announce Monday, we believe HP shareholders appreciate that the value we could create by combining Xerox and HP outweighs - and is incremental to - anything HP could achieve on its own. Despite the HP board’s intention to deny shareholders the chance to choose for themselves, we will press ahead with our previously announced tender offer and electing our slate of highly qualified director candidates.”