Shares of Xerox Holdings Corp.
XRX,
rose Thursday after the printer and copy-machines maker announced an agreement to buy back all of its shares owned by activist investor Carl Icahn at a slight premium over the latest closing price.
“Our decision to repurchase shares is reflective of the confidence we have in our business, our strategy and our ability to improve Xerox profitability and cash performance,” said Chief Executive Steve Bandrowczak. “For nearly a decade, 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.”
Xerox said it will pay $15.84 per share
XRX,
for Icahn’s stake, for a total cost of $542 million. The price represents a 1.6% premium over Wednesday’s closing price of $15.59.
The stock jumped 1.8% to $15.87 just after the opening bell.
Icahn is Xerox’s largest shareholder, with about a 34.2 million-share — or 21.8% —stake, according to FactSet data.
“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. “I helped Xerox maintain its independence while pursuing consolidation within the print industry.”
As part of the deal, Jesse Lynn and Steven Miller, who are employed by Icahn, will resign from Xerox’s board of directors, as will independent director James Nelson.
Xerox expects to fund the share repurchases, which are not a part of any existing share-repurchase program, with a new debt facility.
Xerox expects the deal to close no later than Sept. 29.
Xerox’s stock has gained 9.6% over the past three months and has advanced 7.9% over the past 12 months, while the S&P 500 index
SPX
has climbed 14.9% over the past year.
