Xerox Lines Up Citi Financing for Potential HP Bid

(Bloomberg) -- Xerox Holdings Corp. has lined up financing from Citigroup Inc. as it weighs as potential bid for HP Inc., according to a person with knowledge of the matter.

Xerox is considering making a cash-and-stock offer for HP, said the person, who asked to not be identified because the deliberations are private. Xerox Chief Executive Officer John Visentin would run the combined company under the proposal being discussed, the person said.

Xerox sees room for about $2 billion of annual cost savings from combining the two companies, the person said. No final decisions have been made and there’s no certainty the deliberations will lead to a firm offer, according to the person.

HP, based in Palo Alto, California, rose as high as 18% Wednesday, after the Wall Street Journal reported late Tuesday that Xerox was considering a bid. The shares were up 12% to $20.67 at 9:39 a.m. in New York trading, giving it a market value of about $30.6 billion.

Norwalk, Connecticut-based Xerox rose 2.8% to $37.40, giving it a market value of about $8.3 billion.

A representative for Xerox declined to comment. Representative for Citigroup and HP weren’t immediately available for comment.

Acquiring HP would buttress Xerox’s share of the printing and copying market, which has been hit hard by a global shift toward cloud computing.

HP, which traces its roots to 1939, is the world’s largest personal computer maker behind China’s Lenovo Group Ltd. In 2015, it split from software provider Hewlett Packard Enterprise Co.

--With assistance from Julie Verhage.

To contact the reporter on this story: Ed Hammond in New York at ehammond12@bloomberg.net

To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Ben Scent, Matthew Monks

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