Activist STARTEEPO Presses Xerox to Explore Sale of XFS or the Whole Company
XRX sits 40% above its 52-week low of $1.19 on elevated volume (10× avg).
Summary
STARTEEPO, which owns 7.34% of Xerox in stock and options, used the day after the Q3 miss to escalate: it now wants the board to explore strategic alternatives for Xerox Financial Services and potentially for Xerox as a whole. That is a step beyond its prior letters, which pushed for a strategic review and more transparency on XFS. The fund also floated a near-term move to restructure the outstanding warrants so Xerox can do a debt-for-equity exchange before year-end, arguing lower leverage is worth the dilution. It backs management's debt-reduction focus and the dividend suspension, and repeats its view that Xerox could be worth roughly $3.3 billion, or $18 a share, in a strategic scenario. The pressure lands right after a $1.02 billion quarterly net loss driven by a $959 million goodwill impairment and a cut to full-year free cash flow guidance, so the board now faces a public push for asset sales while it is still working through the $174 million note exchange into 10.250% secured notes.
At the time of this announcement, XRX was trading at $1.67 on NASDAQ in the Technology sector, with a market capitalization of approximately $218.6M. The 52-week trading range was $1.19 to $3.78. This news item was assessed with neutral market sentiment and an importance score of 7 out of 10. Source: BusinessWire.