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Xerox pauses HP hostile takeover, proxy fight amid outbreak

[NEW YORK] Xerox Holdings Corp said it will pause its public pursuit of HP amid the outbreak of the coronavirus.

"Xerox needs to prioritise the health and safety of its employees, customers, partners and affiliates over and above all other considerations, including its proposal to acquire HP," Xerox Chief Executive Officer John Visentin said in a statement Friday, adding that the company continues to monitor the situation closely.

Norwalk, Connecticut-based Xerox intends to continue its pursuit of HP when the pandemic stabilises, according to a person familiar with the matter, who asked to not be identified because the matter isn't public. A representative for HP was not immediately available for comment.

Xerox's shares have fallen about 33 per cent over the past month through Thursday's close while HP's have fallen about 18 per cent. Xerox rose 3.7 per cent Friday to US$24.78 per share at of 9.43 am in New York. HP's shares jumped 3 per cent to US$18.10 at the same time as US stocks rebounded from their worst day since 1987.

Xerox offered to acquire the much larger HP for US$24 a share in cash and stock, or roughly US$35 billion, in a hostile takeover. It has also nominated a slate of directors to replace the company's board. HP has repeatedly rebuffed its efforts, arguing the takeover price undervalues the company and has raised other issues with the proposal.

The printer maker said it would be forced to take a break from its hostile takeover and proxy fight in the wake of the pandemic.

"We believe it is prudent to postpone releases of additional presentations, interviews with media and meetings with HP shareholders so we can focus our time and resources on protecting Xerox's various stakeholders from the pandemic," Mr Visentin said.

Dealmaking across the world is being hampered by the spread of the coronavirus. The volume of M&A announced through the end of February was down 27 per cent to US$419 billion, the slowest start to a year since 2013, according to data compiled by Bloomberg.