HP, Xerox deal may heat up with Icahn’s involvement

The potential acquisition of HP by Xerox could get a bit more interesting, thanks to the involvement of noted activist investor Carl Icahn.

The billionaire investor, best-known for buying up stakes in public companies and then agitating for management and structural changes, said he has acquired a 4.24% stake in HP, and that the long-time symbol of Silicon Valley joining up with Xerox would be “a no-brainer.” Icahn made his comments in an interview with the Wall Street Journal.

Icahn went on to say that he believes “very strongly in the synergies” between Xerox and HP. Both companies are among the biggest in the world in the market for printers and printing services and equipment. HP is also routinely among the largest sellers of PCs and laptop computers. In addition to his HP ownership claims, Icahn also owns a 10.6% stake in Xerox.

HP said last week that it had received “a proposal” from Xerox about a possible acquisition. Xerox has reportedly offered a deal that would value HP at $22 a share, or a total of $33 billion.

In a statement given to this news organization, an HP spokesperson said, “We are aware of Carl Icahn’s investment and are committed to doing what is in the best interests of all HP shareholders.”

The involvement of Icahn in the HP-Xerox matter suggests the HP board will, at the very least, add some pressure to speed

up restructuring efforts the company has recently put in place. In October, HP said it would seek to cut $1 billion in annual expenses, and announced plans to cut 9,000 jobs across the company. Those moves are also occurring as Chief Executive Enrique Lores just took over HP’s top job on Nov. 1.

“Icahn’s involvement certainly does push the deal closer to reality,” said Rob Enderle, president of tech research firm the Enderle Group. “He is not a turn around guy. He is focused like a laser on short term valuation pops. And, initially, mergers like this tend to both spike the acquiring company and particularly the acquired company stock.”

Following the report of Icahn’s HP ownership stake, HP’s stock price rose by almost 3%,to $20.08 Thursday.

Icahn is also no stranger to getting involved in Bay Area tech companies.

In 2012, he disclosed he had taken a 10% stake in Netflix after that companies shares plunged following an ill-fated effort to separate its streaming TV and DVD-rental businesses. By the time Icahn sold off all of his Netflix stock in 2015, he had made almost $2 billion in profit.

Icahn also got involved in eBay and PayPal, when in 2014, he used his stake in eBay to push for changes at the e- commerce company that eventually resulted in eBay spinning off PayPal as its own independent business.