HP CEO questions 'sizeable strategic hole in Xerox's portfolio' as war of letters continues

HP boss slams Xerox for 'aggressive words'

HP and Xerox have continued their letter-sending war, with HP CEO Enrique Lores now criticising Xerox for its "aggressive words" and revealing "concern" about the state of its business.

Earlier this month it was revealed that the two print vendors have been in discussions about a merger of sorts for a number of months, with Xerox then making a bid for HP which was rejected.

The pair have since openly published a series of letters that have been sent both ways, with Xerox's latest containing the threat of a hostile takeover if HP's board does not facilitate a deal.

In the latest letter, HP boss Lores said: "It is clear in your aggressive words and actions that Xerox is intent on forcing a potential combination on opportunistic terms and without providing adequate information.

"When we were in private discussions with you in August and September, we repeatedly raised our questions; you failed to address them and instead walked away, choosing to pursue a hostile approach rather than continue down a more productive path.

"But these fundamental issues have not gone away, and your now-public urgency to accelerate toward a deal, still without addressing these questions, only heightens our concern about your business and prospects."

HP has now claimed to be wary about the state of Xerox's business, pointing out that Xerox has missed expected revenue estimates in four of its last quarters, while its revenue has fallen nearly 10 per cent to $9.2bn (£7.1bn) on a trailing 12-month basis.

HP is also sceptical about whether the cost savings Xerox claims could be achieved through a merger are realistic.

"Our review of synergies based on public information and the limited information you have shared does not support achievable synergies of the scale you suggest, and it appears that your assumptions include significant savings that are already included in each company's independently announced cost-reduction plans," it said.

HP was then damning about the way Xerox has handled its exit from a joint venture with Fujifilm, claiming it fears that the move "has left a sizeable strategic hole in Xerox's portfolio".

"In addition, we have concerns as to the state of Xerox's technology resources, research and development pipeline, future product programmes, and supply continuity and capability," the vendor added.