Xerox Holdings Corp.is considering a bid to acquire HP Inc.in a deal that would combine two struggling technology veterans.
Xerox's board discussed the possibility on Tuesday, the newspaper said here, citing people familiar with the matter.
The report notes Xerox, valued at $8 billion, has backing from a major bank to take over HP, valued at $27 billion - nearly three times more than the former.
HP, which was spun off from HPE last year, is best known as one of the largest PC makers in the world, with revenues of more than $58 billion for the last year, as well as dealing in smaller printers and printing supplies.More news: Amazon Black Friday deals: here's when the madness begins
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Xerox has already secured an informal funding commitment from a major bank, the WSJ reported, on top of proceeds from the sale of its stake in Fuji Xerox.
The agreement will see Fujifilm withdraw a lawsuit it filed against Xerox in 2018 seeking more than $1 billion in damages after a merger between the two firms was scrapped, the Japanese firm said. "It could make sense buying HP's printer business, but it doesn't make any sense for the PC business", said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy. HP has improved somewhat of late, reporting third-quarter financial results that topped expectations, but its stock is down 10% so far this year. Xerox is doing extremely well this year, since its shares are up 84% on a year-over-year basis.
The two sides agreed on this in January a year ago, but Xerox cancelled the deal after some of its largest shareholders raised opposition. (Hewlett-Packard Enterprise, or HPE, is a separate company that was split from HP and includes servers and storage for enterprise).