A major Xerox shareholder has sued billionaire Xerox investor Carl Icahn alleging he bought $1.2 billion worth of HP shares with prior knowledge that Xerox was considering acquiring its larger rival company.
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| (photo: carlicahn.com) |
The Miami Firefighters Relief and Pension Fund filed the lawsuit in New York state court in Manhattan on Friday, alleging Icahn, Icahn Capital LP and High River Limited Partnership breached their fiduciary duties to Xerox by buying HP stock with the knowledge that “Xerox was either considering making an offer to purchase HP, had already approached HP about a possible merger into or acquisition by Xerox, or of the obvious merits of Xerox’s potential acquisition of HP,” according to a report by Bloomberg.
Icahn, who owns almost 11% of Xerox stock, making him the company’s largest shareholder, earlier this month slammed the board at HP for rejecting a $33.5 billion ($22 a share) takeover offer from Xerox.
“I cannot believe that the recalcitrance of HP’s board is driven by any real confidence in its standalone restructuring plan, which the market, shareholders and analysts met with extreme indifference and which seems to amount to little more than rearranging the deck chairs on the Titanic,” Icahn said in a letter to HP shareholders.
In late September 2019, Icahn revealed that Icahn Capital and High River together owned more than 62.9 million shares of HP, making Icahn the fifth-largest shareholder in the company.
“A previous disclosure by Icahn in August listed no HP stock as of June 30,” said Bloomberg. “While the date of Icahn’s purchases were not revealed, an analyst speculated two days after the end of the third quarter that an activist investor might be targeting HP shares citing reasons including a “huge spike” in trading volume without an obvious reason, according to the suit.”
Last week, in a direct appeal to HP shareholders, Xerox upgraded the takeover proposal, saying its offer to buy its larger rival would create a $US66.8 billion printing industry giant and deliver $31 a share to HP shareholders. Xerox also revealed its interest in 50,000 worldwide HP Wide Format customers and an estimated 10,000 global installations of HP’s flagship printer, the HP Indigo Press.
Icahn has yet to respond to the lawsuit.
