Xerox's hostile takeover bid for rival HP Inc. could hit a new snag if Xerox's stock price remains significantly down in the wake of the massive market drop of recent weeks, based an a CRN analysis of the offer.
On Tuesday, Xerox reaffirmed that it is offering $24 per share in its tender offer for HP, through a combination of $18.40 per share in cash along with Xerox stock. However, as Xerox itself noted in its news release Tuesday, the stock portion of the offer is based on Xerox's closing share price on Feb. 6 of $37.68.
Xerox's closing price on Monday was $27.50--following the worst single-day stock market decline since the financial crisis. (On Tuesday, Xerox shares were flat as of this writing.)
The stock portion of the deal includes 0.149 of a Xerox share for every HP share. That equals a value of $5.60 per share, based on the $37.68 share price on Feb. 6. Adding that to $18.40 per share in cash is how Xerox gets to the offer price of $24 per share for HP. read the rest here