Xerox Holdings Corp. said in a letter to HP Inc.'s board of directors that it would take its $33 billion takeover bid to HP's shareholders if the company doesn't reconsider Xerox's acquisition offer by Nov. 25.
Xerox Chief Executive and Vice Chairman John Visentin said in the letter on Thursday that Xerox is "very surprised" that HP's board rejected the buyout offer of $22 a share, which comprises $17 in cash and 0.137 Xerox share for each HP share.
HP rejected Xerox's offer Sunday as too low and not in the best interests of its shareholders. It expressed a willingness to discuss a deal to combine with its smaller rival, though, saying it needs more information about Xerox's business, through a process known as due diligence.
Mr. Visentin said he finds HP's reasoning for rejecting the buyout confusing, as HP's financial adviser, Goldman Sachs & Co., had set a $14 price target with a "sell" rating for its stock in October.
Xerox said its offer represents a 57% premium to Goldman's price target and a 29% premium to HP's 30-day volume-weighted average trading price of $17.
HP didn't immediately respond to a request for comment.
If the two companies aren't able to agree on a mutual due-diligence process by 5 p.m. Eastern time on Nov. 25, Xerox said it will take its case directly to HP's shareholders.
Xerox said it remains willing to devote the resources necessary to complete mutual due diligence over the next three weeks and confirm the cost and revenue benefits it sees if the two companies combine.
Xerox said it encourages HP "not to sanction further delay in light of our extensive discussions to date."
Shares of Xerox rose 0.2%, and HP shares rose 0.9%.