Xerox has secured $24bn in financing for its unsolicited bid to take over printer rival HP.
In a letter to HP's CEO Enrique Lores, Xerox CEO John Visentin confirmed that the vendor has obtained financing to push through a takeover, suggesting that the loan should allay any doubts HP shareholders have over Xerox's ability to afford the transaction.
"It also became clear from our dialogue with your shareholders that you and your advisors have been questioning our ability to raise the capital necessary to finance our proposal," Visentin said.
"We have always maintained that our proposal is not subject to a financing contingency, but in order to remove any doubt, we have obtained binding financing commitments (that are not subject to any due diligence condition) from Citi, Mizuho and Bank of America."
Xerox's first offer was made public at the start of November, with the print vendor offering $27bn.
However, HP's board swiftly rejected the overtures of its smaller competitor.
Xerox's market cap is less than a quarter of HP's - standing at around $7.88bn (€7.04bn) compared with HP's $29.83bn.
HP, which is currently in the process of a restructuring that will include job losses of up to 9,000 staff, was then met by threats of a hostile bid of $34bn by Xerox.
Xerox's board expressed its determination to "expeditiously pursue our proposed acquisition of HP to completion" with "no cause for further delay".
However, five weeks on, the acquisition is still uncertain, and in the interim, the most vocal public supporter of the deal - Xerox's activist investor Carl Icahn - is being sued by another shareholder, who alleges Icahn bought a stake in HP knowing Xerox's bid plan.
Icahn holds 4.24 per cent worth of HP stock, below the five per cent that would have required him to disclose his position, as well as a 10.6 per cent stake in Xerox.
Reacting to the vendor giant tussle, some US partners have told CPI that the benefits of a merger between the two are unclear, considering that neither have invested in emerging technologies.
"The two of them together can certainly cut costs, but that doesn't address the fundamental problem of how are they going to build a company that is focused on emerging technologies and growth technologies, which neither of their product lines are?" Mike Maddox, president and CEO of Lansing, MI-based channel partner ASK said.
Carl Mazzanti, president at Hoboken, NJ-based eMazzanti Technologies, a partner of both vendors, went further suggesting the move could be one born "out of desperation because their foundation is shaking. There's no value-add component [in these offerings]."
Xerox CEO John Visentin is now calling on HP's board to continue negotiations over a merger.
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