LONDON (ShareCast) - (Sharecast News) - HP is "reaching out" to Xerox over its rebuffed $35bn hostile takeover bid, the US tech giant confirmed, as it unveiled plans to return up to $16bn to shareholders.
Publishing first-quarter results, HP said it would seek to return up to $16bn over the next three years and reiterated its criticism of Xerox's approach, which was first made in November.

Xerox raised the cash-and-stock bid earlier in the same month by $2 to $24 per share, giving the deal a total value of around $35bn.

But chief executive Enrique Lores said: "Our commitment to HP shareholders is unwavering, and it's abundantly clear the revised Xerox proposal meaningfully undervalues HP, creates significant risk and compromises the future of our company." HP added that the bid contained "flawed value exchange, irresponsible capital structure [and] overstated synergies".

However, despite the reservations, the company conceded there was "merit" to industry consolidation, and noted: "HP is reaching out to Xerox to explore if there is a combination that creates value for HP shareholders, that is additive to HP's strategic and financial plan."

Lores also told the Financial Times: "We are willing to engage with them. It is not about who buys what, it is really about creating value."

Market Watch reported that Lores had told analysts discussions were already underway.

HP's fourth-quarter revenues came in at $14.62bn, down 0.6% on the same period a year earlier but marginally ahead of analyst forecasts. Diluted net earnings per share fell 10% to $0.46, while adjusted EPS rose 25% to $0.65.

Shares in HP put on 3% in pre-market trading on Tuesday.

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