Icahn Takes Stake in HP, Urges Xerox Merger – Report

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Activist investor Carl Icahn acquires $1.2 billion stake in HP and reportedly urges merger with Xerox

The activist investor Carl Icahn has acquired a $1.2 billion stake in the PC maker HP Inc, in a move that is sure to worry its board of directors.

Carl Icahn has a fearsome reputation as a shareholder who invests in companies and demands a shakeup in order to maximum shareholder (and his) returns.

Icahn made life very difficult for Michael Dell in 2012 and 2013, when he sought to derail his attempts to take Dell back into private ownership for example.

HP Xerox

And now according to the Wall Street Journal, Icahn is pushing for the proposed union of Xerox Holdings Corp and HP Inc, arguing that a combination of the printer makers could yield big profits for investors.

It should be noted that Icahn owns a 10.6 percent stake in Xerox, and now also owns a 4.24 percent stake in HP.

An HP spokesperson meanwhile told Reuters the company is aware of Icahn’s investment and is committed to doing what is in the best interests of all HP shareholders.

Icahn’s involvement comes after Xerox reportedly made a $33 billion cash-and-stock offer last week for HP, a company more than three times Xerox’s size, according to Reuters.

HP confirmed the bid, but has not disclosed the offer price.

“I think a combination is a no-brainer,” Icahn was quoted as saying by the WSJ. “I believe very strongly in the synergies.”

“There will probably be a choice between cash and stock and I would much rather have the stock, assuming there’s a good management team,” he reportedly added.

HP restructuring

Last month HP revealed it would carry out a massive jobs cull in the lead up to Christmas period, when it announced it would axe 9,000 jobs.

HP announced in a statement that its “fiscal year 2020 restructuring plan to simplify its operating model and become a more digitally enabled company.”

HP has already cut tens of thousands of jobs over the years. In 2016 for example it axed 4,000 jobs over over the next three years, up until 2019.

HP was formed in 2015 by the split of Hewlett-Packard into two separate companies.

HPE retained the core enterprise business, such as servers, storage and networking, while HP Inc took on the PC, printer and hardware unit.

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Author: Tom Jowitt
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