Xerox reportedly is preparing to try and get control of the board of HP, after that company has so far rejected the unsolicited takeover bid from Xerox.
Xerox is said to be getting ready to nominate as many as 11 directors to the HP board. That’s according to sources quoted by the Wall Street Journal who note that Xerox has purchased a small stake in HP in recent weeks, giving it the right to nominate directors for elections to be held a the company’s annual meeting this summer.
HP has so far rejected Xerox’s $33 billion takeover offer as being too low.
At Brighton Securities, Chairman George Conboy said this kind of strategy, where a company tries to gain control of the board of directors, can be tough to carry out.
“It’s a difficult, uphill battle for any outsiders to get elected to a corporate board. But it’s sure going to shake the foundations of what has so far been a fairly compliant and passive board at HP,” Conboy said.
He also said that this strategy may also hinge on just how receptive HP shareholders are to any big changes in the company.
“Whenever a company is performing very well it’s almost impossible for an outsider to get on a corporate board. But if you look at HP’s shares over the last five years, they haven’t done very much at all, and investors may be ready to say, let’s bring in some new blood,” Conboy said.
Bloomberg is quoting sources as saying that at this point, Xerox has no plans to increase its bid for HP. Carl Icahn, who is Xerox’s largest shareholder, has been pushing the merger with HP. Xerox has said that combining the two companies could result in about $2 billion in cost savings.