Viral adjustments in business plans have put an end to Xerox’s latest takeover efforts of HP Inc. The merger ploy triggered a response similar to the proxy battle that brought Digital systems into the HP product lineup. Xerox says in a statement it is “prioritizing the health, safety, and well-being of our employees, customers, partners, and other stakeholders.” Its broad response to the pandemic trumps all other considerations, it adds.
Xerox said it’s terminating its $34 billion tender offer to acquire all of HP’s outstanding shares. It will also drop its plans to nominate a slate of directors at HP’s next annual meeting. The global coronavirus crisis has “created an environment that is not conducive to Xerox continuing to pursue an acquisition of HP.”
The proxy battle in 2002 that added Digital products to the HP lineup outran a similar global panic. The HP deal to buy Compaq in that year emerged within a week of the 9/11 attacks. More than six months of struggles within HP’s shareholder base ensued. The Xerox bid for the non-enterprise side of HP covered five months. After the Xerox statement to call off the acquisition, HP says, “We remain firmly committed to driving value for HP shareholders.” HP adds that its focus will “remain on addressing the needs of our ecosystem of stakeholders around the world.”
An acquired HP would have been the other shoe finally dropping after that Compaq-HP merger. While analysts at first praised the synergy that brought Alpha, VAX, and OpenVMS to an HP lineup, results in practice were mixed. That merger led to OpenVMS gaining a newer hardware platform in Integrity servers. OpenVMS migration to the Itanium chipset took about three years and led to an Alpha shutdown. Meanwhile, less-profitable and larger PC business failed to trigger overall HP gains.
Taking on that wide swath of business with small margins led to HP’s breakoff of its PC business from enterprise concerns. HP Enterprise now directs sales of the only OpenVMS hosts until VSI completes a migration of the legacy OS. Current VSI plans promise that release late in 2021. A platform of virtualization from Stromasys remains another way forward for OpenVMS in a state with fewer changes. VSI now controls the futures of OpenVMS on Itanium. An Intel solution for OpenVMS futures, without a migration, remains an option using the Stromasys Charon virtualization.
HP Inc. says the Xerox bid undervalued the side of HP where Intel servers are built. Share prices have tumbled for both companies since viral times swept through the markets. The offer from Xerox was set at $34 billion. HP’s valuation fell to $25 billion, while the former $8 billion valuation of Xerox is now $4 billion.