(Reuters) – Activist investor Carl Icahn has purchased $1.2 billion interest in HP Inc., and is pushing the pc maker to merge with the printer-maker Xerox Corp. (a), the argument is that the european union would be able to generate large profits for the investor, the Wall Street Journal reported on Wednesday.
FILE PHOTO: Billionaire activist-investor Carl Icahn gives an interview on the FOX Business Network’s Neil Cavuto show in New York city on February 11, 2014. REUTERS/Brendan McDermid
Icahn, who owns a 10.6% stake in Xerox is now in the possession of a 4.24% stake in HP, the Magazine said
An HP spokesperson told Reuters the company was aware of Icahn’s investment and is committed to doing what is in the best interests of all HP stockholders. HP did not disclose how much stake Icahn have the PC maker.
Xerox has made an approximately $33-billion cash-and-stock offer for the HP, which is more than three times as Xerox’s size, as Reuters reported last week. HP, the take-over bid, but has not disclosed the price of the offer to purchase.
“I think it’s a combination of a no-brainer,” Icahn was quoted as saying by the Magazine.
“I believe very strongly in the synergies,” he said, adding that “there will probably be a choice between cash and stock, and I’d much rather have stock, the only difference is that there is a very good management team.”
– Xerox is of the opinion that it will be able to reach at least us $2 billion in annual cost savings by the creation of an office-technology giant, a source told Reuters last week.
The billionaire told the Journal that his team was looking at the HP at the end of February, and that he bought the shares of the company as at the end of April to mid-August, and even though he didn’t have a deal with Xerox to have in mind when he started to collect the shares.
Icahn said that he believed that as a combined company, it is in the best interests of both sets of shareholders, given the potential for cost savings, and bring them to market to a more balanced portfolio, the printer’s offer, the wall street journal reported.
This is not the first deal that Icahn has been trying to orchestrate it for a small business to buy a bigger one.
In June, the US casino operator Eldorado Resorts, Inc. agreed to a larger peer-to Caesars Entertainment Corp. for $17.3 billion, including debt. Icahn had also gained seats in the council of This.
Icahn and Xerox, do not immediately respond to Reuters ‘ requests for comment late on Wednesday.
Reporting Maria Ponnezhath and-Anurag-Moon; Editing by Subhranshu Sahu and Mark Kuber