Is the Xerox Saga Nearing an End?
The no-moat firm won't combine with Fuji Xerox, will settle with Carl Icahn and Darwin Deason, and will replace current management.
In a possible final turn of events in the saga of Xerox versus Carl Icahn and Darwin Deason, Xerox (XRX) has agreed to terminate its transaction agreement to combine with Fuji Xerox and entered into a settlement agreement with Icahn and Deason, again. The deal reflects the initially announced plan from May 2, which sees the replacement of Xerox’s current CEO, chairman, and several other directors. The settlement with Icahn and Deason resolves the pending proxy contest against Xerox and its directors. The new board of directors plans to meet to discuss "strategic alternatives" for the company in an attempt to maximize shareholder value. We remain skeptical of the turnaround efforts for the no-moat, negative-trend, high-uncertainty company owing to continued secular headwinds in the printing business, and we reiterate our $32 fair value estimate despite the management changes.
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Andrew Lange does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.