HP has rejected another takeover offer from Xerox, saying that the deal currently on the table ‘significantly undervalues’ it as a company. 

Connecticut-based Xerox said on 6 January that it had secured $24bn in financing from several financial institutions, including Citigroup and Bank of America, as it continued a pursuit which began several months ago. 

HP responded in an open letter, released on 8 January, stating that Xerox still hadn’t addressed ‘the key issue – that Xerox’s proposal significantly undervalues HP – and this is not a basis for discussion.’ 

This followed Xerox CEO and vice chair John Visentin saying the company had engaged in ‘constructive dialogue’ with many of HP’s shareholders and that he believed ‘bringing our companies together would deliver substantial synergies and meaningfully enhanced cash flow that could, in turn, enabled increased investments in innovation and greater returns to shareholders.’

Xerox has talked recently about its willingness to pursue a hostile takeover of its California-based rival, but Mr Visentin added in his letter that he was still willing to meet with Mr Lores and Mr Bergh in person to further negotiations. 

Carl Icahn, an activist investor with significant stakes in both companies, is known to be in favour of the proposal and the possibility of Xerox dealing directly with HP’s shareholders remains real.