Icahn on attack in HP bid

The man behind the Xerox bid to take over HP, Carl Icahn, has penned an open letter to HP shareholders imploring them to ask the HP board to accede to the bid. 

Icahn is the biggest shareholder in Xerox with 11 per cent of its stock, and has recently bought 63 million HP shares, giving him 4.24 per cent of the company.

The HP Board has comprehensively rejected the Xerox bid, which at $22 a share is 10 per cent less than the company's year high of $24. The Board said the offer was too low and would saddle the business with a gigantic $25bn debt, and that HP was well positioned for growth on its own.

Icahn's letter to HP shareholders says the deal “is a no brainer” and goes on to throw various barbs and insults at the HP board.

Icahn's bid is a naked attempt to get more cash for shareholders, facilitated, he claims, by the combined company being able to chop $2bn out of its operating costs. The 83-year-old billionaire has spent a lifetime engineering corporate deals.

HP is seven times the size of Xerox, with sales last year of US$58.8bn, while Xerox achieved sales of US$9.8bn.

The HP Graphic Solutions business, which develops well known print industry solutions including Indigo, PageWide, Latex, Scitex, and DesignJet, represents about eight per cent of the HP business.

The Xerox production print business, which includes Iridesse, iGen, and Versant, is about four per cent of the overall Xerox business.