The "market turmoil" brought about by the current coronavirus (aka Covid-19) pandemic brings about an environment "not conductive" for Xerox to acquire HP, the printer maker claims as it withdraws its $35 billion offer for the larger rival.
"While it is disappointing to take this step, we are prioritizing the health, safety and well-being of our employees, customers, partners and other stakeholders, and our broader response to the pandemic, over and above all other considerations," the Xerox statement continues. The company adds the continued HP refusal of the offer was nothing less than a "great disservice" for stockholders, and thanks the banks willing to provide financing even as the pandemic wrecks havoc on the markets.
The months-long saga of Xerox wanting to buy HP was set to come to an end early in March, when the HP declared the "unsolicited exchange offer" not in the best interest of the company. According to HP, the $35bn stock-and-cash offer would saddle the smaller company with debt, and as a result jeopardise the joint venture. Some shareholders did disagree with the board conclusion, mind, chief of which being powerful activist investor Carl Icahn, a man with a stake in both companies.
The idea of Xerox buying HP came about in May 2019. A regulatory filing reveals that after Icahn, the largest Xerox shareholder, acquired a 4% stake in HP, suggested a merger of the two companies would create value. A September 2019 meeting of Xerox and HP execs left the larger company with "reservations" about the deal, while Xerox set about putting even more effort in securing funding for the acquisition.