A $30 billion offer from Xerox Holdings Corp. (NYSE: XRX) to acquire HP Inc. (NYSE: HPQ) was refused earlier this week by HP’s board of directors. In its letter, HP said it had “unanimously concluded that [the offer] significantly undervalues HP and is not in the best interests of HP shareholders.”

Thursday morning, Xerox CEO and Vice Chair John Visentin sent HP CEO Enrique Lores and Chair Chip Bergh a letter expressing surprise that HP “summarily rejected our compelling proposal.” Visentin sounded shocked, shocked, at HP’s rejection.

Xerox had offered $22 a share in cash and stock for HP, $17 in cash and 0.137 shares of Xerox stock. The offer represented a premium of 21% to HP’s stock price and had a total value of more than $30 billion.

Lores and Bergh should not be shocked, however, at Visentin’s promise to launch a campaign to win over HP shareholders. Unless HP and Xerox can reach an agreement over a mutual due diligence schedule by Monday, November 25, Visentin clearly stated his intention:

Xerox will take its compelling case to create superior value for our respective shareholders directly to your shareholders. The overwhelming support our offer will receive from HP shareholders should resolve any further doubts you have regarding the wisdom of swiftly moving forward to complete the transaction.

Visentin also rejects HP’s contention that the offer is highly conditional and uncertain: “There will be NO financing condition to the completion of our acquisition of HP.”

Visentin cited HP’s own financial advisor, Goldman Sachs, which “set a $14 price target with a ‘sell’ rating for HP’s stock after you announced your restructuring plan on October 3, 2019. Our 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.”

Launching a proxy fight can be a drawn-out affair and it is almost always expensive. There’s no reason to believe that HP will just roll over and take an offer that has been rejected already. That would in fact not be in shareholders’ interest. HP is betting that either it can squeeze more out of Xerox (doubtful) or that a white knight will ride to the rescue with a higher bid (also doubtful). White knights for PC and printer makers are scarce these days.

Xerox is betting that no competing bid can be drummed up and that HP shareholders will figure that out and take this once-rejected deal because it’s the best offer they’ll get.

As for HP shareholders, the old adage remains sound: You pays your money and you takes your chances. Want to bet on the horse that got you to this point or take a chance on a different one? Shareholders have until Monday at 5:00 p.m. ET to place their bets.

Xerox shares traded up about 0.6% in the mid-morning Thursday, at $38.51 in a 52-week range of $18.58 to $39.47.

HP stock traded up about 0.1% at $19.72, in a 52-week range of $15.93 to $24.17.

If there’s an immediate advantage, Xerox appears to have it, but investors aren’t flocking to one side or the other yet.

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