How would you respond if a company decided to offer four times what it’s worth for your own seemingly more stable company? Probably skeptically, which is exactly how HP reacted to Xerox (market cap: $8.3 billion) offering $33.5 billion for it. But, with the spectre of Carl Icahn looming in the background, HP also responded rather politely, saying it’s possible that a combined HP-Xerox might, in fact, be a pretty good idea, especially if it were to happen in that order rather than the reverse.
Has Xerox taken this moderately encouraging word in a generous spirit of cooperation and collaboration? Has it hell. Instead, it’s going down what some might call a more Carl Icahn-y route.
“We are confused by this reasoning in that your own financial adviser, Goldman Sachs & Co, set a $14 price target with a ‘sell’ rating for HP’s stock after you announced your restructuring plan,” Xerox wrote in its letter to HP…. “Unless you and we agree on mutual confirmatory due diligence to support a friendly combination by Nov. 25, Xerox will take its compelling case to create superior value for our respective shareholders directly to your shareholders,” the company said in the letter.