Xerox Holdings Corp. is preparing to nominate as many as 11 directors to HP Inc.’s board, according to people familiar with matter, in an aggressive move to push a $33 billion unsolicited takeover bid for the maker of computers and printers.
Xerox in recent weeks bought a small HP stake, which gives it the right to nominate directors for elections to be held at the company’s annual meeting this summer, the people said. The deadline for nominations to HP’s board is Friday. Xerox could still decide to not follow through with the nominations.
Xerox in November offered to buy its much larger rival for $22 a share in cash and stock. HP rejected the bid as too low and questioned Xerox’s ability to finance it. Xerox earlier this month said it had secured up to $24 billion in debt financing; in response, HP reiterated that the bid was too low.
Xerox hopes the move will put pressure on HP to negotiate a deal, which it so far has refused to do. Xerox may ultimately take its bid directly to HP shareholders in the form of a tender offer, some of the people said. Should there be a vote on the nominees, it could serve as a referendum on the proposed deal and install a slate of directors more favorable to a takeover.
The move harks back to the 1980s, when bare-knuckle hostile takeovers were more common. Carl Icahn, who made his name as a corporate raider in that era, is pushing the bid as Xerox’s largest shareholder. He is a big investor in HP as well.
He got involved at Xerox alongside Darwin Deason, another big shareholder. Mr. Icahn owns a roughly 11% Xerox stake while Mr. Deason, who sold Affiliated Computer Services Inc. to Xerox in 2010, owns about 4%, according to FactSet. Mr. Icahn owns a similar amount of HP.
Xerox has argued a combination would create a printer-and-PC behemoth better equipped to deal with industrywide declines. It has said the companies could yield cost savings of more than $2 billion by joining forces; HP has been skeptical of that figure. HP has also cast doubt on Xerox’s business prospects.
Xerox has a market value of roughly $8 billion, while HP’s is nearly $32 billion after its shares surged on the takeover interest.
Proxy contests waged by companies are unusual and are more typically fought these days by activist investors. Since 2013, companies have only launched five, according to Proxy Insight, a provider of shareholder voting data.
The most recent—and most prominent—was when Broadcom Ltd. nominated directors to Qualcomm Inc.’s board in 2018 after the chip maker rejected its $117 billion takeover bid. The proxy fight was ultimately abandoned; days before Qualcomm shareholders were set to vote on the nominees, President Trump blocked Broadcom’s bid.
—Corrie Driebusch contributed to this article.
Write to Cara Lombardo at cara.lombardo@wsj.com
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