In an effort to help cultivate a merger between HP and Xerox, activist investor Carl Icahn has purchased a $1.2bn stake in HP Inc because he believes that a deal between the two companies could lead to big profits for investors.
Icahn already owns a 10.6 percent stake in Xerox and after his recent purchase, he now owns a 4.24 percent stake in HP according to the Wall Street Journal.
A spokesperson from HP informed Reuters that it is aware of Icahn’s investment though the company is committed to doing what is in the best interest of all of its shareholders.
Xerox recently made a $33bn cash-and-stock offer for HP despite the fact that the company is three times larger than Xerox. While HP has confirmed Xerox’s bid, the company has not disclosed the exact amount of the offer.
Xerox and HP Inc
Icahn explained to the Wall Street Journal that a deal between the two companies makes perfect sense to him, saying:
“I think a combination is a no-brainer. I believe very strongly in the synergies. 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.”
Ichan and his team began looking into HP back in February but the investor waited until April to buy shares in the company’s stock. At that time though, he wasn’t thinking about a potential deal between HP and Xerox.
According to Ichan, a combined company is in the best interests of both sets of shareholders as the two printing giants could bring a more balanced portfolio of printer offerings to market while also cutting costs.
The Xerox and HP deal is still in the early discussion phase and we won’t know more until the companies decide to finalize the acquisition or one of them backs out.