Icahn May Seek Xerox Board Seats
November 23 2015 - 9:30PM
Dow Jones News
Xerox Corp. has struggled for years with shrinking sales of
printers and copiers. Now the 109-year-old company has a new
challenge: Activist investor Carl Icahn has taken a big stake and
is trying to shake things up.
Mr. Icahn disclosed Monday that he has accumulated a 7.1% stake
in Xerox, saying the company is undervalued and he may seek board
seats. Xerox shares, which had fallen 22% so far this year as of
Monday's close, rose 7.4% in after-hours trading to $11.69.
Mr. Icahn's disclosure comes a month after Xerox said it would
launch a review of its business. After posting its first quarterly
loss since 2010, the company's chief executive, Ursula Burns, said
on Oct. 26 that "undertaking a comprehensive review of structural
options for the company's portfolio is the right decision at this
time."
Xerox spokesman Sean Collins said Monday that the company
welcomed open and constructive dialogue with shareholders. "Our
board and management team are committed to improving performance
and creating value for shareholders and will continue to take the
actions to advance these objectives," he said.
Despite several initiatives aimed at moving beyond its
traditional office equipment roots, Xerox's revenue has been
shrinking for years. The company, which had nearly $20 billion in
revenue last year, ended Monday with a market value of about $10.6
billion.
Ms. Burns, a Xerox veteran who has run the company since 2009,
has tried to transition into a services-based business that handles
the back-office operations for companies and governments. Document
management, bill processing and other services made up 56% of the
company's top line during the nine months through Sept. 30.
Her boldest move was the $6.4 billion acquisition of Affiliated
Computer Services, which had a big business providing work for
state Medicare and Medicaid agencies. The deal added about 74,000
people to Xerox's then-workforce of about 54,000.
Mr. Icahn's stake would make the activist hedge-fund manager,
who has also agitated for shake-ups from Clorox Co. to eBay Inc.,
the second-biggest holder of Xerox shares behind institutional
holder Vanguard Group Inc., according to FactSet data.
Mr. Icahn said in a securities filing that he intends to hold
talks with Xerox's management and board concerning "improving
operational performance and pursuing strategic alternatives, as
well as the possibility of board representation."
Drew FitzGerald and David Benoit contributed to this
article.
Write to Josh Beckerman at josh.beckerman@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 23, 2015 21:15 ET (02:15 GMT)
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