It is confirmed that Xerox is abandoning its pursuit of the hostile takeover of HP, owing to the economic turmoil caused by the ongoing COVID-19 pandemic.
Over the past few months, HP’s board of directors have constantly turned down Xerox’s proposal for a merger, launching several measures aimed at rejecting the deal.
As per recent reports, Xerox Holdings Corp is formally withdrawing its proposal to take over rival HP and replace HP’s board with its own nominees.
Earlier this month, the company had postponed a planned meeting with HP’s stakeholders to help find solutions for its own coronavirus related challenges. Xerox has also reportedly abandoned its effort to challenge HP’s board of directors at the company’s annual shareholder meeting.
Xerox’s board of directors seem to believe that pursuing HP without access to its books is too risky. The board said there is no way for the company to assess the impact of the COVID-19 situation on HP’s business.
Xerox mentioned in a statement that while it is disappointing to make this decision, the health, safety, and well-being of its employees, partners, customers, and shareholders, and the company’s response to the coronavirus pandemic is presently Xerox’s topmost priority over all other considerations.
However, Xerox also believes that a merger between the two companies could offer compelling long-term financial as well as strategic advantages.
It appears like the continuous refusal by HP’s board of directors over several months to meaningfully engage coupled with the company’s continued delay tactics has resulted in substantial damage to the HP shareholders who have shown considerable support for the deal.
Analysts claims that Xerox’s decision to withdraw its proposal could be a lucky break for both the companies. It will allow the two companies to survive and flourish amidst the ongoing coronavirus pandemic and economic turmoil.