Activist investor Carl Icahn backs HP-Xerox deal with billion-dollar stake in HP

Brendan McDermid/Reuters

• Activist investor Carl Icahn told The Wall Street Journal that he supports Xerox’s potential takeover of HP. 
• The billionaire — who already holds a 10.6% position in Xerox — also revealed a 4.2% stake in HP worth about $1.2 billion, according to the WSJ. 
• Icahn said he supports the deal because of the cost synergies it could create, which Xerox said could total north of $2 billion. 
• Watch Xerox and HP trade live on Markets Insider. 

Billionaire activist investor Carl Icahn supports the combination of printer makers Xerox and HP, according to The Wall Street Journal. 

The vocal Xerox shareholder told the WSJ that he also owns a 4.2% stake in HP worth around $1.2 billion based on the company’s stock price as of market close Wednesday. 

Icahn, who owns a 10.6% stake in Xerox, said he supports the deal because of its potential for cost synergies, which Xerox said could add up to more than $2 billion. 

“I think a combination is a no-brainer. I believe very strongly in the synergies,” Icahn told the WSJ.

He added: “There will probably be a choice between cash and stock and I would much rather have the stock, assuming there’s a good management team.” 

The WSJ reported last week that Xerox was considering a takeover of HP, sending shares of both companies climbing. 

HP is more than three times the size of Xerox, and an offer would likely come at a premium to HP’s $28 billion market value. 

According to the WSJ, Icahn began sizing up HP earlier this year after its shares plunged 17% in a single day on weak earnings. He began scooping up shares in April, but had no thought of a deal with Xerox at the time, the WSJ reported.

An HP spokesperson confirmed Icahn’s stake in an email to Markets Insider. 

“We are aware of Carl Icahn’s investment and are committed to doing what is in the best interests of all HP shareholders,” the spokesperson said in an email Thursday. 

Icahn stopped building his position in HP in August as his stake approached the 5% mark, which would require him to disclose it.