HP's board of directors said Sunday that they unanimously rejected a proposal from Xerox to acquire the company, because the offer is not in the best interest of shareholders and would undervalue HP.

Xerox had offered HP $22 per share in its takeover bid for the company. The bid consists of 77% cash and 23% stock, or $17 in cash and 0.137 Xerox share for each HP share.

"In reaching this determination, the Board also considered the highly conditional and uncertain nature of the proposal, including the potential impact of outsized debt levels on the combined company's stock," the board wrote in a letter to John Visentin, Xerox's CEO.

HP announced in October that it will cut between 7,000 and 9,000 jobs by the end of fiscal 2022 as part of a broader restructuring plan that it estimates will save $1 billion a year. The cuts would amount to nearly 16% of its 55,000 employees across the world, according to data from FactSet.

The software company is worth $29 billion and is over three times the size of Xerox, which makes printers and copiers, in terms of market cap.

"We note the decline of Xerox's revenue from $10.2 billion to $9.2 billion (on a trailing 12-month basis) since June 2018, which raises significant questions for us regarding the trajectory of your business and future prospects," the board wrote.

"In addition, we believe it is critical to engage in a rigorous analysis of the achievable synergies from a potential combination," the board wrote. "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 was created after Hewlett-Packard separated its enterprise business — Hewlett Packard Enterprise — which sells data storage equipment and servers, among other things.

Activist investor Carl Icahn, who owns a 10.6% stake in Xerox, recently bought a $1.2 billion stake in HP. He was pushing for the merger of the two companies, as he believed that a combined company would be in the best interests of both sets of shareholders given the potential for cost savings and a balanced portfolio of printer options.