back to article Why can't you be a nice little computer maker and just GET IN THE TRUNK, Xerox tells HP in hostile takeover alert

Xerox is escalating its takeover efforts against HP Inc with an explicit threat that it could soon begin a hostile takeover. An open letter to HP's board posted on Thursday demands that the printer and PC arm of the legendary technology biz agree to enter the next phase of merger talks or face a share buyout campaign. In …

  1. J. Cook Silver badge

    ... are we sure it was Iching! that suggested that Xerox write the letter in the first place?

    1. Mark 85 Silver badge

      Sounds like classic Icash tactics to me: If all else fails, hostile take over time, replace the board, screw everyone inside and outside the company and PROFIT".

  2. Imhotep Silver badge

    An Offer You Can't Refuse

    Bundling failing companies to set the stage for one big failure?

    If I had stock, I'd grab the chance to sell it for the premium offered.

    1. tfewster

      Re: An Offer You Can't Refuse

      Carl Icahn...called the proposed merger a "no-brainer"

      1. Anonymous Coward
        Anonymous Coward

        Re: An Offer You Can't Refuse

        Icahn is saying that this valuation of HP is likely as good as it gets.

        It values HP at near it's peak price in 2019 and at a ~30% premium compared to when the offer was made.

        Looking at how well competitors are doing in the printing market, the declining PC market and the challenges HP have with selling ink and other consumables, even if he is wrong, I suspect it may only be by a few percentage points assuming HP can rediscover their mojo.

        Given the HP's track record for senior management, I find it hard to believe that Xerox can do worse. A Xerox/HP combination could potentially provide some competition to Canon before they become unstoppable.

        But then I suspect recruiting at a graduation ceremony at a clown college would also improve HP's chances of improving senior management, so my advice isn't such a "no brainer"...its more likely a floater that needs two or three flushes before it goes away.

        1. Anonymous Coward
          Anonymous Coward

          Re: An Offer You Can't Refuse

          Yes. Perhaps if HP had maintained its early presence in the phone market things would be different.

          1. Anonymous Coward
            Anonymous Coward

            Re: An Offer You Can't Refuse

            The phone market that massively consolidated around the two leading brands, a lot of also rans and cheap Chinese phones?

            HP could have spent hundreds of millions more trying to keep up, but I'm not sure it would have resulted in any real difference to their fortunes without some seriously good features that couldn't be copied by Apple/Google in a few months to nullify any real competition.

            Unless I missed the sarcasm...

          2. Stuart Castle Silver badge

            Re: An Offer You Can't Refuse

            I doubt HP would have survived in the phone market. They were never a massive presence in the market, and even those that were have largely been replaced by cheap Chinese makes. Even the mighty Nokia is a shadow of it's former self.

            HP had good PDAs, but that market is effectively dead, having been killed by the Smartphone. They also, as I understand, had good Mobile phones, but they backed Windows on mobile. Despite Microsoft spending billions, and buying Nokia effectively as a way of marketing Windows, this failed. This is a sad thing, IMO, because based on my admittedly limited experience, Windows Mobile was better than Android.

            They could have transitioned to Android, but this would have cost money, and they likely would not have been one of the big Android vendors anyway.

    2. sbt

      Sh*t printer business you got there, it'd be a shame if nothing happened to it!

      A crying shame.

  3. John Brown (no body) Silver badge

    HP insisting on due diligence?

    That's novel!

    1. T. F. M. Reader Silver badge

      Re: HP insisting on due diligence?

      It's actually consistent: they think the acquiring party doesn't need to do any.

    2. Gordon 10 Silver badge

      Re: HP insisting on due diligence?

      Xerox have nothing to lose by agreeing to let HP do DD. We all know they are sh*t at it.

      1. aks

        Re: HP insisting on due diligence?

        Shite because of the auditor they chose. Shite because they only wanted a provisional DD. Super-shite because they didn't even read the contents of the DD before flinging gigabucks at it.

  4. eldakka Silver badge

    Activist investor Carl Icahn, who owns more than $1bn in HP shares, has already thrown his backing behind the Xerox buyout, calling the proposed merger a "no-brainer" for the two tech giantsIcahn's pockets.

    Fixed that quote to reflect what it means.

  5. Red Ted

    "legendary technology biz"

    Nope, that bit got carved off just before the Compaq merger, initially as Agilent and now renamed to Keysight.

    1. Anonymous Coward
      Anonymous Coward

      Re: "legendary technology biz"

      And all the profitable services went to HPE

    2. sw guy

      Re: "legendary technology biz"

      Thanks for remembering the truth

  6. Mr Dogshit

    be a nice little computer maker

    Pretty sure Wistron and Hon Hai Precision Industry Company Ltd make HP's PCs.

  7. poohbear

    A dispassionate observer may assume that HP has things in their books that should not see the light of day....

    1. Mark 85 Silver badge

      Name one big company of late that does't have things hidden away in basement, in a closet, behind a locked door.... etc.

  8. dave 81

    But HP are shift.... and I may be completly out of the loop here.

    No idea what Xerox is like, but from my experience of HP anything, they have shit software, shit support, and okay hardware. WTF does Xerox want with them, especially for that kind of money?

    1. localzuk Silver badge

      Re: But HP are shift.... and I may be completly out of the loop here.

      Xerox's business is mostly large MFDs and the like. HP's is mostly smaller printers (workgroup and what have you). The 2 do match quite nicely in that regard. HP also have their burgeoning 3D printing division, and their large format division as well.The technology that underplays all of that is a very nice asset.

      Throw in the fact that both engage in "business services" and it kinda makes sense.

      But the rest? Laptops, Desktops, Tablets & Displays? I could see that being spun off into a separate business relatively soon after merging.

      I would've thought HP buying Xerox would've been the more sane way of things going though. HP could buy them, and bolster their various divisions with the assets nicely.

      1. dave 81

        Re: But HP are shift.... and I may be completly out of the loop here.

        Thanks, that makes sense.

        Although HP buying Xerox? With HP's support, and QA? Dead within a decade.

      2. Fred Goldstein

        Re: But HP are shift.... and I may be completly out of the loop here.

        Spin off the computers and leave Xerox with the HP Ink? Hmmm, what might that spinoff be called? How about Compaq?

      3. aks

        Re: But HP are shift.... and I may be completly out of the loop here.

        You'd assume that the combined companies would have a superb skill-set but from their deteriorating financials, maybe not. The question for the future is whether they have the IPR's to grow. I suspect that the majority of their patent portfolio is now very long in the tooth.

    2. Mike Moyle

      Re: But HP are shift.... and I may be completly out of the loop here.

      And, of course, it has to be remembered that it's being supported by Carl Icahn whose lifelong strategy involves getting control of ailing companies, loading them up with debt to pay for the buyout, strip-mining every salable asset, and leaving everyone but the preferred-level stockholders both broke AND holding the bag for the debt. So, from a stockholder's POV, the deal makes perfect sense.

      From everyone else's, not so much.

  9. Zippy´s Sausage Factory

    My money's on a hostile takeover by Xerox - always has been. If it were me I'd do that - replace everyone, take it over, rename all the bits I actually wanted as "Xerox this/that/other" then sell the rest to someone else for a chuck of cash to pay off some of the debts of the acquisition.

    Replacing the existing board also means that if there is shenanigans in the books that are tied to HP board members you just can just throw the previous board members to the wolves should you need to...

  10. adam payne

    HP says it will not consider any merger with Xerox until it gets the ability to perform due diligence of the prospective buyer, while Xerox says that it has a problem with HP's demand only going one way.

    Wow HP may have actually learnt something from the mess they made during the autonomy buy out. Colour me shocked.

    1. Will Godfrey Silver badge

      Or they want to hide the fact they still haven't cleaned up their act.

  11. fobobob

    Don't Copy that FloHPy?

  12. JohnFen

    Time to get the popcorn!

    This should be an entertaining dinosaur death match.

    1. aks

      Re: Time to get the popcorn!

      Which one is Godzilla and which King Kong?

  13. Erik4872

    End-stage capitalism on display

    OK, in one corner you have Xerox who is still making copiers and document management stuff in an era where people don't print much. In the other corner, you have an ink and toner manufacturer that happens to sell printers, a range of garbage consumer PCs and a range of OK middle of the road business PCs. All this in an era where people don't print much AND when PCs are being used mainly for work while consumers are consuming on phones and tablets.

    "Let's tie these rocks together and see if they float!"

    I understand that both these companies are huge and have massive potential for being bled dry during the dismantling process. But, I think it's awful for the people still working there. A perfect example of this is DXC, which is in the process of being parted out, and my assumption is that the carcass is going to be sold to one of the big Indian outsourcers. HP Xerox is just going to cut and cut until they can no longer convince anyone to buy their products anymore, then suddenly dump 100,000 people out onto the job market.

    1. localzuk Silver badge

      Re: End-stage capitalism on display

      Hahahaha, in an era where people don't print much. That made me laugh. Maybe home users don't print much. Business? That's still as print obsessed as ever.

      1. Pascal Monett Silver badge

        I concur. As a freelance consultant, I see many different office types (accounting, finance, insurance, technical, industrial, etc..), but I have never seen even one without paper everywhere - even in IT departments.

        The printer business may be declining in the home, but in the business it is flourishing.

        1. Charles 9 Silver badge

          Because paper trails are still a legal requirement in many aspects of business.

  14. LeahroyNake

    I agree with your post apart from 'in an era where people don't print much'?

    For home users fair enough but most homes do not have a photocopier or large format printer.

    Xerox seem to be in the right area and from what I know do not sell garbage home ink machines that cost less than a new set of ink. But! They are continually fighting with other copier manufacturers dropping their pants on pricing (both hardware and contracted maintenance) to get contacts while screwing the dealers that offer better service.

    HP are not in the serious business of small format office copiers, I never come up against a quote for their machines on anything more than a few machines. It's always Canon or Ricoh Xerox for large deals. Sharp and Kyocera, maybe the trash HP Samsung that are cheap as chips and just as squishy in any sort of decent usage scenario. Their large format, I was praising them last week. Its a shame that their supply chain has gone to pot and customers are looking at 10 day plus delivery for ink unless they want to pay 20% over the odds.

    Anyway back to not printing much... The controls that enable reduction in print via maybe Equitrac, Papercut etc.. Yeah we sell these and are still seeing steady revenue from the license renewals that mostly offset the reduction in print no matter what the marketing bollocks says.

  15. luis river

    Possible Split HP inc

    Except by buy innovative tech Printer 3D, printer grand format and consumer printer market share , I dont understandable that buyout. For that I believed Split HP inc in two parts and then Xerox buyout printer HP business. and HP retain Pcs business and tech associated

  16. Precordial thump

    Xerox to launch takeover bid for Wurlitzer

    Plan to market a reproductive organ...

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