Xerox moves to overthrow HP's board by nominating 11 new directors
Xerox's latest move in the battle to acquire HP - or to engineer an HP takeover of Xerox
Xerox has upped the pressure in its takeover battle for HP by nominating 11 new directors to replace HP's current board at company's shareholder meeting in April.
The new directors would almost certainly wave through Xerox's $33.5 billion bid for HP, which Xerox claims enjoys a groundswell of support among HP shareholders.
These nominations are a self-serving tactic by Xerox to advance its proposal
However, Xerox justified the move by claiming that the new slate of directors will be able to better serve HP shareholders, as they "understand the challenges of operating a global enterprise and appreciate the value that can be created by realising the synergies of a combination with Xerox".
The directors nominated by Xerox include former CEOs, consultants and many investment bankers:
- Betsy Atkins (former CEO of Clear Standards)
- George Bickerstaff (co-founder and managing director of M.M. Dillon & Co)
- Carolyn Byrd (CEO of GlobalTech Financial)
- Jeannie Diefenderfer (former executive of Verizon)
- Kim Fennebresque (former chairman and CEO of Cowen Group)
- Carol Flaton (former managing director at AlixPartners)
- Matthew Hart (former COO of Hilton Hotels)
- Fred Hochberg (former chairman and president of the Export-Import Bank of the United States)
- Jacob Katz (former chairman of Grant Thornton)
- Nichelle Maynard-Elliott (former executive director of M&A for Praxair)
- Thomas Sabatino, Jr. (former executive vice president and general counsel of Aetna)
HP's board currently consists of 12 members, including prominent figures, such as Dion Weisler and CEO Enrique Lores.
The company, as expected, was not impressed. "We believe these nominations are a self-serving tactic by Xerox to advance its proposal, that significantly undervalues HP and creates meaningful risk to the detriment of HP shareholders," HP said in a statement.
It also blamed Xerox shareholder Carl Icahn for continuing spat between the two companies.
"We believe that Xerox's proposal and nominations are being driven by Carl Icahn, and his large ownership position in Xerox means that his interests are not aligned with those of other HP shareholders," HP said.
Xerox has been trying to acquire HP for months, but has only seen its bids rejected twice by HP board.
Despite repeated rejections, Xerox has been able to secure $24 billion in financing from three banks and threatened to pursue a hostile takeover of HP.
A deal between the two companies is expected to be highly complicated considering the fact that HP is more than three times the size of Xerox.
Xerox's current market value is less than $8 billion, compared to HP's $32 billion valuation.