The problem for Xerox Chief Executive Officer John Visentin is that HP holds most of the cards. The Palo Alto, California-based company could generate just as much short-term value for its existing shareholders as the Xerox bid. An offer from HP at a 30% premium to Xerox’s current share price would cost it close to $11 billion. Based on analysts’ earnings estimates, that might generate returns after three years of just more than 13%. That’s more than Xerox’s cost of capital but considerably less short-term value than HP could generate through a buyback.

Source: Washington Post November 18, 2019 18:45 UTC