Global technology giant Hewlett Packard (HP) has accused activist investor, Carl Icahn, of pushing for a hostile takeover. In a statement made public, it claimed Icahn is trying to force a merger because he stands to profit from ownership stakes in both companies.
Xerox officially launched its hostile takeover on Thursday January 23, 2020. It started by announcing that it plans to nominate 11 new directors to replace HP’s entire board of directors; at an upcoming shareholder meeting, setting the stage for a tense proxy battle.
However, Hewlett Packard fired back, calling Xerox’s nominations to its board a “self-serving tactic”. Further, it reiterated that “value creation for HP shareholders is not dependent on a Xerox combination.”
In a comprehensive statement released later on Thursday; the company also took aim at Icahn and blamed him for the hostile nature of the takeover.
“We believe that Xerox’s proposal and nominations are being driven by Carl Icahn. Xerox’s proposed transaction attempts to use HP’s financial capacities for the benefit of Xerox shareholders,” it said.
Bid significantly undervalues us, HP says
Because of his large ownership position in Xerox; Icahn’s interests “are not aligned with those of other HP shareholders” and; that he would “disproportionately benefit” from a merger between the two companies, HP’s statement held.
Also, HP emphasized Icahn’s “meaningful influence” over Xerox and its board of directors. It points to his role in the appointment of current CEO John Visentin, a former Icahn consultant; as well as his ties to the Xerox board—and especially its chairman, Keith Cozza; who is also CEO of Icahn Enterprises.
In its statement, it also reiterated its rejection of Xerox’s $33.5 billion takeover bid; saying that it “significantly undervalues HP and creates meaningful risk to the detriment of HP shareholders.”
Icahn, who has a net worth of $17.1 billion according to Forbes’ estimates; holds an 11% stake in Xerox and almost a 5% stake in HP. He has been one of the deal’s biggest advocates; repeatedly urging HP shareholders who agree with the merger to push for immediate action.
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