Printer giant Xerox Holdings has taken the gloves off when it took its $35 billion bid for HP directly to the shareholders of the PC maker.

Xerox had launched its official tender offer for all outstanding shares in HP on Monday, after it recently increased the value of its takeover offer.

But Xerox now has to contend with a “poison pill” shareholder rights plan that HP adopted last week, in a further effort to fend off Xerox’s advances.

Share offer

The offer from Xerox Holdings is valued at $24.00 per share, comprising $18.40 in cash and 0.149 Xerox shares for each HP share.

“Our proposal offers progress over entrenchment,” said John Visentin, vice chairman and CEO of Xerox. “HP shareholders will receive $27 billion in immediate, upfront cash while retaining significant, long-term upside through equity ownership in a combined company with greater free cash flow to invest in growth and return to shareholders.”

Last week HP’s board of directors had announced its ‘strategic and financial value creation plan’ on top of its poison pill shareholder rights plan, with the news that it was also expanding its share buyback program and returning billions of dollars to shareholders.

That came after HP also revealed last week its latest financial results, which showed declines in both profits and sales.

HP has recently axed 9,000 jobs in an effort to lower its costs going forward.

Hostile takeover

Xerox had earlier this month increased its hostile offer price to $24.00 per share (from $22.00 per share), raising its original $33.5 billion takeover bid to $35 billion.

That came after HP’s board of directors in January once again rejected an unsolicited takeover offer from Xerox, saying the deal “significantly undervalued” the PC maker.

Before Christmas Xerox had begun its hostile bid for HP, after it made good its threat to approach HP shareholders directly with its leveraged buyout offer.

Xerox had initially set a deadline of 25 November 2019 for HP’s board of directors to respond to Xerox’s $33.5bn buyout offer for the PC maker.

HP’s board refused to engage with Xerox and failed to open its books so Xerox could conduct due diligence.

The hostilities began after activist investor Carl Icahn acquired a $1.2 billion stake in HP and pushed for the proposed union of Xerox and HP, arguing that a combination of the printer makers could yield big profits for investors.

Icahn is said to own 10.85 percent of Xerox and 4.24 percent of HP.

Activist shareholder

Carl Icahn has a reputation as an activist shareholder who invests in companies and demands a shakeup in order to maximum shareholder (and his) returns.

Icahn for example made life very difficult for Michael Dell in 2012 and 2013, when he sought to derail his attempts to take Dell back into private ownership for example.

HP it should be remembered was formed in 2015, by the split of Hewlett-Packard into two separate companies.

HPE retained the core enterprise business, such as servers, storage and networking, while HP Inc took on the PC, printer and hardware unit.

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