Activist Carl Icahn to Sell His Xerox Stake Back to Company for $542 Million
Xerox was one of Icahn Enterprises’ five largest holdings as of June 30
Xerox Holdings is buying back all $542 million of its stock held by Carl Icahn and his affiliates, including the corporate activist’s holding company, Icahn Enterprises, for $15.84 a share.
Xerox was one of Icahn Enterprises’ five largest holdings as of June 30. At the time, the stake amounted to a 21.8% position in the Norwalk, Connecticut company.
The price being paid by Xerox is the closing price of Xerox shares yesterday.
"As a longtime shareholder of Xerox, I've watched this iconic brand endure the hardest of times and come out stronger, all while returning substantial amounts of capital back to shareholders," Icahn said in a statement. "I will continue to be a champion of the company and hope my activism will long be remembered as Xerox continues its positive momentum.”
Icahn Enterprises, which is structured as a limited partnership, has been the target of a short-selling campaign by Hindenburg Research, which issued a report on May 2 alleging that it mispriced assets, was overleveraged and that its dividend was at risk, among other things.
Icahn rejected the claims, but units of Icahn Enterprises fell by more than half. The units traded at $19.83 in morning trading Thursday, up 0.91%.
Following the Hindenburg report, on August 4, Icahn Enterprises reported that its second quarter loss had more than doubled from the year ago period, to $269 million. The company halved its quarterly dividend to $1.
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Icahn also said at the time that the company had been hurt by a major short wager on the U.S. stock market. In a letter, the one time corporate raider said he would eschew short-selling in the future and concentrate on activism.
“Carl and his affiliates have served as important shareholders to Xerox, providing invaluable counsel, guidance and activism to support our evolution as a workplace technology leader,“ said Steve Bandrowczak, CEO of Xerox.
Two Icahn employees, Jesse Lynn and Steven Miller, as well as independent director James Nelson, will resign from Xerox’s board upon closing of the transaction, which should be completed by tomorrow, September 29.
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