Xerox grabs $24bn from banking titans to fund hostile takeover of HP Ink Xerox has climbed a financial hurdle in efforts to snaffle HP Inc by convincing three banking giants to stump up the greenbacks to partly fund the $33bn hostile takeover bid. Citigroup Inc, Mizuho Financial Group and Bank of America have agreed to lend Xerox up to $24bn in “binding financing commitments”, Xerox confirmed in an …
HP Ink's business model:
sell cheap printers and make money on the ink.
Current / future threats to that business model:
People are printing a lot less than they used to because of internet, smartphones, tablets and stuff like that. They will probably continue to buy the loss-leader printer out of habit, and for the few times when they do need it; or for the scanner function, then not actually buy any/much ink for it.
For example, my 3 y/o Canon laser still has 70% remaining the the toner cartridges that came with it when new.
There, you read it here first, just like with Autonomy.
They also design & sell expensive, sometimes very expensive, printer systems for customers who need throughput measured in kppm ( or in mph if its a complete production process ), plus various hardware / software options for reducing ink usage which is actually a basic requirement for some print media ( of which paper is just a subset nowadays ). afaik their home office stuff is all bought in & rebadged
" if all parties concerned ... crashed and burned."
I'd guess that one of those parties - most likely the banks that are coming up with $33bn - put themselves in front of the queue and ensure they get the cash from selling off the remnants. And likely nist that when the remnants are sold off they get first option at financing the sell-off.
" if all parties concerned ... crashed and burned."
I'd guess that one of those parties - most likely the banks that are coming up with $24bn - put themselves in front of the queue and ensure they get the cash from selling off the remnants. And likely nist that when the remnants are sold off they get first option at financing the sell-off.
There are already too many large companies with too much power trying to gain even more power.
Competition law is just way to weak to stop all these stupid mergers.
What benefit to the customers of these companies will these mergers provide. Probably long term, poorer quality products at higher prices as they keep removing competitors. If you look at intel they spent way too many years where there was little competition and what happened. Token improvements, nothing more. Luckely in Intels case AMD managed to inovate and Kick Intel where it hutrs. And then look, intel starts talking about new stuff. (still not here, but maybe?).
When you look at most of these VERY large companes how much "inovation", I mean REAL blue sky thinking goes on. Not, lets replace this part in a printer with a part that costs 1% less to drive up profits.
Most of these companies now only seem to be growing by buying other companies. In other words they have forgotten how a business really should works. You make stuff that people want and sell it.
"There are already too many large companies with too much power trying to gain even more power."
That's only part of the problem. If you have the two boards get together and do a straight merger - so many shares in the new entity pro-rata the shares in the old ones you have the problem you state. When you have something like this you have the additional situation that the new entity is saddled with stupid amounts of debt and likely going down the tubes as a consequence so the competition is reduced by two instead of one.
Well when Carl Icahn is in favour of it and calls it a no-brainer, then obviously it is a bad idea. I can't imagine a company surviving with a debt load like that, but he is only interested in short term profits for himself after all, not long term viability of the company. I don't even have a clue how many companies he has ruined so far, but it's quite a few.
Debt interest on $33bn per year? Maybe $3-4bn.
1-2% finders fee for the financial broker and lawyers, so around $300m for that.
Possible giant corporation tax reduction with all that lovely new debt to pay for.
I see many positives for banking parasites, while everyone else gets screwed. And that is Wall Street explained..
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2023
