LONDON (ShareCast) - (Sharecast News) - Xerox is reported to be considering an audacious cash-and-stock offer for larger rival HP worth more than $27.0bn.
HP, the PC and printer maker, has a market capitalisation of $27.7bn, more than three times Xerox's $8.05bn. But the Wall Street Journal said Xerox's board had meet this week to discuss a possible approach, citing unnamed sources familiar with the matter. The newspaper added that the photocopier and printer specialist had an informal funding commitment from an unnamed but "major" bank.

There was no guarantee Xerox would pursue the acquisition, however, the WSJ said.

Both companies are looking at cutting costs in an increasingly tough market. Last month, HP - which was created when Hewlett Packard Enterprise was spun out of the Hewlett-Packard in 2015 - said it would cut between 7,000 and 9,000 jobs by the end of 2022 as part of a restructuring plan intended to save around $1.0bn a year.

Xerox had been in talks to merge with Fujifilm but abruptly called off the $6.1bn deal last year, prompting the Japanese firm to sue for $1.0bn in damages. The lawsuit was dropped on Tuesday after Xerox agreed to sell its 25% stake in its long-standing joint venture with Fujifilm for $2.3bn.

Analysts at Santander said a deal between Xerox and HP would be "an audacious move that would unite two fading stars of technology."

Neither company has issued any official statement on the report, although HP has stated it does not comment on rumours.

In pre-market trading, Xerox was off 3% while HP was ahead 9%.

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