Xerox’s beleaguered stock got a boost after the company agreed to split into two companies, something activist investor Carl Icahn had been advocating. Bobbi Rebell reports.
Investors cheer Xerox split
Xerox is splitting itself into two companies. one holding its legacy printer operations, the other its business processing outsourcing unit. Investors cheering that announcement Friday. The move comes amid pressure for a split from activist investor Carl Icahn, although the company says it was considering that strategy before he made his demands public.
Reuters Breakingviews Rob Cyran explains:
SOUNDBITE: ROB CYRAN, COLUMNIST, BREAKINGVIEWS (ENGLISH) SAYING:
“They bought a services business so they thought, ok, that is the future. We are going to sell copiers and services. And you know it didn’t really work. The services business is ok, but the copier business is melting down. 12:10:10 And then Icahn said look these business are stupid they don’t belong together.”
Icahn will also get three board seats on the outsourcing company.
Gerber Kawasaki’s Ross Gerber applauds the move:
SOUNDBITE: ROSS GERBER, CEO, GERBER KAWASAKI (ENGLISH) SAYING:
“Carl Icahn is doing a service to the American people by basically attacking all the big old stodgy companies out there and buying up large stakes and then forcing them to split up which is ultimately good for these companies.”
Xerox’s two businesses may not stay independent. Xerox said it would speak to anyone interested in buying either company. The top executives and the names of the two companies are still undecided.