After Naming Xerox’s Board, Icahn Now Wants to Name HP’s Board

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Andy and Julie PlataAn American Printer Commentary 
By Andy & Julie Plata 
Co-CEOs 
American Printer, and the OutputLinks Communications Group 

January 24, 2020 

Xerox’s HP Nominees - Unsolicited 

  • Our summary of Xerox’s announcement of HP Board nominations.  

Xerox logoXerox announced its intention, as a new owner of HP stock, to nominate 11 former C-Level executives with global financial and operational experience to replace HP’s Current Board. Xerox’s nominees include former executives from firms, including Wynn Resorts, United Airlines, American Airlines, Aetna, Hilton Hotels, Novartis, and Verizon. The 11 nominees are said to have proven expertise in company transformations and creating value for shareholders. 

Carl Ichan owns 10.6% of Xerox and 4.24% of HP, and Xerox now also owns HP stock 

John VisentinJohn Visentin, Xerox’s Vice Chairman, and CEO said: “We believe HP shareholders will be better served by a new slate of independent directors who understand the challenges of operating a global enterprise and appreciate the value that can be created by realizing the synergies of a combination with Xerox.” 

For the full text of Xerox’s announcement >>> 

Our Question? 
Commercial printers seem to have difficulty securing decent equipment financing due to banks’ skepticism about the print industry’s viability, so why are Citi, Bank of America, and Mizuho Bank lining up to lend Xerox $24,000,000 to purchase HP? 

HP’s Response to Xerox’s Unsolicited Nominees 

  • Our summary of HP’s response to Xerox’s Board nominations.  

HP logoHP believes those nominations are a self-serving tactic by Xerox to advance its proposal, that significantly undervalues HP and creates meaningful risk to the detriment of HP shareholders…Xerox’s proposed transaction attempts to use HP’s financial capacities for the benefit of Xerox shareholders. 

Carl IcahnHP believes that Xerox’s proposal and nominations are being driven by Carl Icahn, and his large ownership position in Xerox means that his interests are not aligned with those of other HP shareholders. Due to Mr. Icahn’s ownership position, he would disproportionately benefit from an acquisition of HP by Xerox at a price that undervalues HP…The HP Board is unwavering in its commitment to HP shareholders and will continue to take all appropriate actions to advance and protect HP shareholders’ best interests…The HP Board will review the proposed Xerox nominees, and respond in due course.  

For the full text of HP’s Response>>> 

CNN’s Analysis 

David Goldman of CNN Business states: 

  • A marriage between the companies could make sense.  
  • HP had surprised investors by growing faster than many had believed possible after its 2015 split with HP Enterprise (HPE), but it has struggled in recent quarters. 
  • Xerox, like HP, relies on a dying business for the bulk of its sales and profit. It sells and services copy machines and printers, primarily for corporations. But sales are falling, declining in each of the past seven quarters. 

For the full text of Davis Goldman’s analysis >>> 

Thanks for reading. Your thoughts on this topic are appreciated. 

Empowering the print message for the digital age, 
Andy & Julie Plata 
Co-CEOs, American Printer, and the OutputLinks Communications Group 

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