Reasons to Read

HP’s board rejected Xerox acquisition bid, saying the offer undervalues the company and is not in the interests of the shareholders.

• The company also expressed concerns about Xerox’s declining fortunes and the debt that would be needed to finance the acquisition.
• HP is in the midst of a restructuring plan to simplify its operating model and become more digitally enabled.
• HP hopes the plan will shave $1 billion in annual cost.

Management cited its confidence in its strategy and ability to execute to drive sustainable long-term value as part of the reason for rejecting the offer, but did say it remained open to exploring whether there is value for HP shareholders through a combination with Xerox.