HP shows signs of recovery as Xerox circles

HP insists its strategy is working as Xerox confirms hostile takeover bid is imminent

Xerox has confirmed plans to launch a hostile takeover of HP Inc, as HP reported a slight acceleration in revenue growth.

Continuing a string of letter exchanges, Xerox CEO John Visentin said the actions of HP's board "defies logic", accusing them of refusing to engage in due diligence.

"While you may not appreciate our ‘aggressive' tactics, we will not apologise for them," he said, revealing that Xerox will take its $33bn (£25.6bn) bid directly to HP shareholders.

HP Inc announced its Q4 earnings at the same time, with revenue rising 0.3 per cent year on year, but accelerating on the 0.1 per cent the vendor reported for Q3.

The growth came in the PC division (up four per cent), with print revenue down six per cent. Troubles remain in the print supplies business, which saw sales drop seven per cent year on year.

HP CEO Enrique Lores refused to discuss the battle with Xerox on an earnings call, but said the Q4 "capped off a very solid year" for the vendor.

"I want to be very clear, our focus remains on creating value for all of our shareholders and delivering for our customers, partners and employees," he said, claiming that the vendor's restructuring plan - which has seen it announce job cuts and strip out the regional layer of management - is already showing benefits.

Lores reiterated that the problems in the supplies business are being driven predominately by cheaper clones sold online. "Low visibility" of inventory is specific problem in the EMEA region.

"We're making good progress addressing both problems," the chief exec added.