Carl Icahn, the “Wolf of Wall Street” and a radical investor, lashed out on Wednesday at the company’s board of directors for rejecting Xerox’s offer. Icahn, who holds about 10.85 percent of Xerox’s outstanding shares and 4.24 percent of HP’s outstanding shares, urged HP shareholders to appeal to the board to further explore the possibility of a Xerox acquisition. He suggested that HP executives were selfish in their motives for rejecting the offer.
“It may sound a bit cynical, but as an activist over the past few decades, I’ve not only made billions of dollars for Icahn’s business, but for all shareholders, because I’ve stood up to management and boards that refuse to change the status quo because they could threaten their huge revenues.” While there are many good and thoughtful boards and management, there are also many bad boards and management that fail to act in the best interests of shareholders at a heavy cost to shareholders, as HP’s board and management now do. ”
HP’s board voted unanimously last month to reject Xerox’s offer, saying it was not in the best interests of shareholders and underestimating HP’s value. Xerox offered to buy HP for $22 a share, giving it a market capitalisation of about $29 billion, three times Xerox’s.
HP has been making extensive cost-cutting cuts, planning to cut thousands of jobs and save $1 billion a year. “Since June 2018, Xerox’s revenue has fallen from $10.2 billion ,based on the past 12 months) to $9.2 billion, raising serious questions about your business trajectory and future prospects,” said HP’s directors, rejecting Xerox’s offer. ”
Icahn helped fuel the merger after buying a stake in HP for $1.2 billion. Mr Icahn said in an interview that he thought the move was “not going to be brain-sic” and was “very confident in synergies”.
But so far, the boards of the two companies have disagreed. After being rejected by HP’s board of directors, Xerox decided to make a direct offer to shareholders after giving HP the opportunity to reconsider the acquisition.
“The potential benefits of a merger between HP and Xerox speak for themselves,” John Visentin, Xerox’s chief executive, said last week. This enables more investment in innovation and greater returns for shareholders. “