SABIC chief: ‘Firms with integrity will reap reward’

Firms that meet world standards will be in the driving seat to secure new investment, says Yousef Al-Benyan SABIC CEO. (Supplied)
Updated 14 October 2019

SABIC chief: ‘Firms with integrity will reap reward’

  • Companies with the highest standards of corporate governance would benefit most from rising foreign investment in the Kingdom, says Al-Benyan

RIYADH: The opening up of Saudi Arabia’s stock exchange to international investors has attracted scrutiny of the Kingdom’s publicly traded companies and their standards of compliance and integrity, according to the CEO of SABIC.

Yousef Al-Benyan, CEO and chairman of Saudi Basic Industries Corp. (SABIC), said that companies with the highest standards of corporate governance would benefit most from rising foreign investment in the Kingdom.

The petrochemical giant hosted a conference in Riyadh on Thursday aimed at promoting integrity and transparency which attracted corporate leaders from around the world as well as NGOs and government representatives.

“By strengthening integrity and compliance capacity across the Saudi supply chain, companies and investors can grow with confidence. The opening of the Saudi stock market to foreign investors is increasing attention on the compliance practices of our companies. Those who meet international standards and expectations will be in the driving seat to secure new investment,” said Al-Benyan.

He said that the the event aimed  to highlight corporate integrity’s links with growth and investment.

The event follows the opening of the Saudi Stock Exchange (Tadawul) to foreign investors and its recent listing on the MSCI Emerging Markets Index (MSCI), an international market benchmark that provides additional assurance to potential investors.

HP rejects Xerox takeover bid, says open to acquiring Xerox instead

Updated 49 min 29 sec ago

HP rejects Xerox takeover bid, says open to acquiring Xerox instead

  • In rejecting Xerox's $33.5 billion cash-and-stock acquisition offer, HP said the offer “significantly” undervalued the personal computer maker
  • Xerox made the offer for HP on Nov. 5 after resolving its dispute with its joint venture partner Fujifilm Holdings Corp.
NEW YORK: HP Inc. said on Sunday it was open to exploring a bid for US printer maker Xerox Corp. after rebuffing a $33.5 billion cash-and-stock acquisition offer from the latter as “significantly” undervaluing the personal computer maker.
Xerox made the offer for HP, a company more than three times its size, on Nov. 5, after it resolved a dispute with its joint venture partner Fujifilm Holdings Corp. that represented billions of dollars in potential liabilities.
Responding to Xerox’s offer on Sunday, HP said in a statement that it would saddle the combined company with “outsized debt” and was not in the best interest of its shareholders.
However, HP left the door open for a deal that would involve it becoming the acquirer of Xerox, stating that it recognized the potential benefits of consolidation.
“With substantive engagement from Xerox management and access to diligence information on Xerox, we believe that we can quickly evaluate the merits of a potential transaction,” HP said in its statement.
The move puts pressure on Xerox to open its books to HP. Xerox did not immediately respond on Sunday to a request for comment on whether it will engage with HP in negotiations as the potential acquisition target, rather than the acquirer.
HP on Sunday published Xerox CEO John Visentin’s Nov. 5 offer letter to HP, in which he stated that his company was “prepared to devote all necessary resources to finalize our due diligence on an accelerated basis.”
Activist investor Carl Icahn, who took over Xerox’s board last year together with fellow billionaire businessman Darwin Deason, said in an interview with the Wall Street Journal last week that he was not set on a particular structure for a deal with HP, as long as a combination is achieved. Icahn has also amassed a 4% stake in HP.
Xerox had offered HP shareholders $22 per share that included $17 in cash and 0.137 Xerox shares for each HP share, according to the Nov. 5 letter. The offer would have resulted in HP shareholders owning about 48% of the combined company. HP shares ended trading on Friday at $20.18.
Many analysts have said there is merit in the companies combining to better cope with a stagnating printing market, but some cited challenges to integration, given their different offerings and pricing models.
Xerox scrapped its $6.1 billion deal to merge with Fujifilm last year under pressure from Icahn and Deason.
Xerox announced earlier this month it would sell its 25% stake in the joint venture for $2.3 billion. Fujifilm also agreed to drop a lawsuit against Xerox, which it was pursuing following their failed merger.

Test for new HP CEO
In 2011 as the centerpiece of its unsuccessful pivot to software. Little over a year later, it wrote off $8.8 billion, $5 billion of which it put down to accounting improprieties, misrepresentation and disclosure failures.
More recently, HP has been struggling with its printer business segment recently, with the division’s third-quarter revenue dropping 5% on-year. It has announced a cost-saving program worth more than $1 billion that could result in its shedding about 16% of its workforce, or about 9,000 employees, over the next few years.
Xerox’s stock has rallied under Visentin, who took over last year as CEO. However, HP said on Sunday that a decline in Xerox’s revenue since June 2018 from $10.2 billion to $9.2 “raises significant questions” regarding the trajectory of Xerox’s business and future prospects.