Xerox woos HP stock owners with talk of layoffs, selloffs and cash payouts post merger Xerox is taking the gloves off to launch a hostile takeover bid for HP Ink, er, Inc – by courting its shareholders with a 33-page document explaining why the pair will be a corporate match made in heaven for investors. The presentation, including slide decks, was filed with the US Securities and Exchange Commission on Monday. …
Xerox promises all of this for after the merger :
"On the $2bn of "synergy savings" promised, Xerox said it will consolidate from 8,000 to 3,000 suppliers to cut costs; slash its own IT bill to 1 per cent of revenue from 4 per cent; simplify stock keeping units and beef up inventory management, as well as rationalise (ie sell off) real estate in 555 locations to cut property owning down to just 261 sites."
Why wait ? Go ahead and do all that stuff, it will help you survive a little bit longer.
You'll also note that everything proposed = a reduction of actual corporate ability. It is headlinenumber-driven rather than desiredoutcome-driven. Selling the taxi will lower costs wonderfully, but longer-term it doesn't help a taxi driver earn money.
e.g., "slash its own IT bill to 1 per cent of revenue from 4 per cent" == sacking 75% of staff and/or deleting 75% of outsourced machinery+services. Going from 4%->3% would imply some serious fat in the org'n -- to suggest that 75% of a function is complete bullshit, strikes me as... bullshit.
What's the term for a triple oxymoron?
When someone trying to sell you something using words like "undisputed", this means they are lying.
When they use the word "strategic" you need to ask precisely who or what this war is directed against.
And logic? Logic is tautological by definition.
...unless the "strategic logic" is that Icahn aims to beat Ellison by buying his own carrier fleet.
Money will start flowing to investors after the "initial deleveraging period"
Well, that sounds suspiciously like never. I have a feeling the real payoff is going to be for the people financing the takeover - there probably won't be any assets left after the "deleveraging".
"Visentin and Co have bid $33.5bn for HP, inclduing $17 per HP share in cash, plus 48 per cent of the merged company worth $14 per share, or an implied/aggregated value, by Xerox's estimates, of $31 per share – HP's stock is changing hands today for just over $20."
Of course this only works if you accept their $14/share valuation of the extremely highly-leveraged post-buyout entity. Or, more to the point, if you believe the *market* will accept their $14/share valuation of said now-debt-ridden legacy duck attempting to swallow a legacy turkey...
Having played at that level in that industry and country, I recognise the behaviour and the language patterns: accountants have no contact with this ; it is entirely the self-insulated upper "management".
You'll note, for example, the random jamming together of non-sequitur terms which to an incompetent :
a) seem to be related,
b) seem to be important.
.
e.g.: "run-rate cost synergies" is initially baffling then snortingly funny
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