Activist investor makes waves at Xerox
Tuesday, December 12, 2017
Xerox has robustly defended its performance in response to a move by activist investor Carl Icahn to make changes to the group’s board, with Icahn even going so far as to effectively call for the removal of CEO Jeff Jacobson.
Icahn has built a multi-billion-dollar fortune over the course of 40 years, based on an aggressive investment strategy. His Icahn Group is the biggest individual investor in Xerox, with a 9.7% stake.
Icahn’s representative Jonathan Christodoro has resigned from the Xerox board, which brought to an end the so-called ‘standstill arrangement’ between the two parties that had maintained the current state of affairs since the summer of 2016.
In an interview with the Wall Street Journal, Icahn was quoted as saying: “The CEO is the most important person in the company. We believe Xerox still has potential, but it will go the way of Kodak if there aren’t major changes… The times have changed but not the old guard that controls the board.”
Jacobson became CEO of Xerox after the group split into two companies at the beginning of this year. Prior to that he was president of Xerox Technology. In a 30-year printing industry career he was previously CEO of Presstek and Kodak Polychrome Graphics.
Xerox issued a statement defending the company’s performance in response to Icahn’s move, stating that the group was “ahead of plan relative to our well-defined Strategic Transformation”.
“In 2017 alone, we expect to meet or exceed our target of $600m of gross cost savings, a critical step as we continue our journey to improving our revenue trajectory. Xerox has just introduced the largest product launch in the company’s history, which should further enhance the company’s revenue trajectory,” the statement said.
The group also reaffirmed its full year guidance, and pointed out that its share price had risen by almost 30% this year, outperforming the S&P 500.
Following Christodoro’s resignation, Icahn Group has nominated four director candidates to stand for election at Xerox’s 2018 AGM, which will take place at an as-yet-unspecified date.
They are: Christodoro, Keith Cozza the president and CEO of Icahn Enterprises, Jay Firestone the chairman and CEO at Prodigy Pictures, and Randolph Read the president and CEO of Nevada Strategic Credit Investments.
At the close of trading on the New York Stock Exchange yesterday (11 December), Xerox shares were effectively static at $29.59.