Sources also said the bid consists of 77% cash and 23% stock, or $17 in cash and 0.137 Xerox share for each HP share. The deal, if accepted, is expected to generate about $2 billion in cost synergies and result in HP holders owning 48% of the company, the sources said.
Nearly a month ago on Oct. 10, HP closed at $16.03. The offer represents a 37% gain from that low. The shares traded on Thursday at $19.61, below the offer price as investors have their doubts the deal will go through. Concerns about the tie-up largely stem from the wide size disparity between HP and Xerox. HP, worth $29 billion, is more than three times the size of Xerox in terms of market cap.
At the close, the combination would leave the company five times levered and three times levered within 24 months, though the tie-up is expected to leave its debt investment grade.
The new figures follow…