Xerox Willing to Up HP Acquisition Offer, Creates M&A Officer Role

Just three weeks since HP blasted Xerox over a move to nominate post-takeover board members, Xerox on Monday said it would increase its offer price to HP to $24 a share, or about $34 billion.

More specifically, Xerox announced its intention to launch a tender offer on or around March 2, for all outstanding shares of HP common stock. The price of $24 a share is comprised of $18.40 in cash and 0.149 Xerox shares for each HP share.

No word yet from HP if Xerox did enough to sweeten the deal.

In the meantime, it looks like Xerox is bringing more executive power to the deal.

The company last week appointed Nicole Torraco as senior vice president and chief strategy and M&A officer, in a newly created role. Torraco reports to John Visentin, vice chairman and CEO.

She joined Xerox in May 2018 and led the company in closing several acquisitions including Vader Systems, Heritage Business Systems, Rabbit Office Automation and Arena Group.

Xerox’s Nicole Torraco

“Xerox is going through a rapid and unprecedented transformation. Our rigorous approach to M&A and focus on targeted growth opportunities allow us to deliver value for all our stakeholders,” Torraco said.

Xerox says it has met several times with some of HP’s largest stockholders, and that there’s positive feedback about a combined Xerox-HP, which would deliver the kinds of returns, growth improvements and best-in class human capital that would result from merged organization.

Xerox has posted a lot of information on its website about what a proposed combined organization would offer. For example, the combined organization by the numbers would result in about $4 billion in free cash flow before any synergies; about $2 billion in cost synergies; and about $67 billion in 2020E pro forma combined revenue.

Xerox’s latest move extends a battle for ownership between the two printer company giants that began last November, when Xerox offered to buy HP for $22 a share, made up of 77% cash and 23% stock.

HP’s board of directors quickly and unanimously rejected the takeover bid, citing a significant undervaluing of HP. Unhappy about HP’s response, Xerox promised to use a heavier hand, signaling a potential takeover bid.

By the second week in December, Xerox made its case to HP shareholders and Visentin in early December, and publicized its proposal with HP shareholders. The back and forth continued with HPs final rebuke of Xerox in January when it made a move to nominate post-takeover board members.