Xerox’s decision came after it said earlier this month it would postpone meetings with HP shareholders to focus on coping with the coronavirus pandemic.
Xerox was set to challenge HP’s board at the latter’s annual meeting of shareholders in May, but will now abandon this effort as well as its tender offer for HP’s shares, the company said in a statement.
“While it is disappointing to take this step, we are prioritizing the health, safety and well-being of our employees, customers, partners and other stakeholders, and our broader response to the pandemic, over and above all other considerations”, Xerox said.
Xerox added that there were compelling long-term financial and strategic benefits in a potential combination with HP. While it is possible that the companies will choose to engage once the coronavirus crisis subsides, Xerox’s decision means that it will not get another chance to put such pressure on HP until its next annual shareholder meeting in spring 2021.
The banks financing Xerox’s takeover bid “never wavered in their commitments” despite the market turmoil fueled by the coronavirus outbreak, Xerox said.
“HP would like to thank our shareholders, partners, customers and employees for their input and continued support through this process”, HP said in a statement.
The market rout triggered by the global coronavirus outbreak has led many companies to hit the pause button on mergers and acquisitions, sabotaging the hopes of corporate advisers who expected a dealmaking bonanza this year.
Both Xerox and HP have seen their business suffer in the wake of the coronavirus crisis, though HP’s stock has proved more resilient, as employees working for home to protect themselves from the virus boosted revenue for its PCs and other office equipment. Xerox shares have lost more than half their value in the last five weeks, while HP shares are down about a quarter.