XEROX, the company best known for photocopiers - ask your parents - is considering making a bid for PC and printer maker HP Inc.
Such a deal would see a company that was big in the 1970s finally make its way into the nineties.
That's all according to the Wall Street Journal, in whose ears 'people familiar with the matter' have been muttering.
However, Xerox will have to dig deep to make its cash-and-stock offer add up, with HP currently trading at a market value of about $27 billion to Xerox's $8 billion or so.
But it's not just idle gossip, according to the WSJ. The company has also received informal funding assurance from a major bank, although it's equally likely that executives at Xerox will sobre up in time to call the whole thing off.
Xerox could generate up to $2 billion in annual cost savings for Xerox, the newspaper suggested. It's not clear where those savings would come from but, let's face it, it's more likely to be from staff cuts than executive bonuses.
HP Inc was formerly known as Hewlett-Packard, one of the big-names that made Silicon Valley, founded in 1939. In 2015, Hewlett-Packard was ripped apart in a demerger. The supposedly humdrum PC and printers business, which was imaginatively renamed HP Inc. The exciting enterprise business, meanwhile, was renamed Hewlett Packard Enterprise (HPE).
While HP Inc has done better than expected, it is currently struggling with its printer business segment. The division's revenue for the third-quarter dropped five per cent year-on-year, despite the 2016 acquisition of Samsung's printer business.
Last month, the company said that it was planning to cut up to 9,000 jobs (nearly 16 per cent of its 55,000-employee global workforce) by the end of 2022. The job cuts are part of a restructuring programme intended to cut costs and boost profitability.
The company added that it planned to shake-up its struggling printer business under a restructuring programme that will include a price hike on printers that can be used with non-HP ink cartridges, which is sure to be a winner. With Cartridge World and other makers of knock-off printer-ink generics.
HP Inc has confirmed in a statement that it has received a proposal from Xerox and that it's considering a "business combination".
"We have great confidence in our multi-year strategy and our ability to position the company for continued success in an evolving industry, particularly given the multiple levers available to drive value creation," an HP spokesperson said.
"Against this backdrop, we have had conversations with Xerox Holdings Corporation from time to time about a potential business combination... Most recently, we received a proposal transmitted yesterday [Tuesday].
"We have a record of taking action if there is a better path forward and will continue to act with deliberation, discipline and an eye towards what is in the best interest of all our shareholders." µ
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