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Xerox said to split in two; Icahn gets board seats: WSJ
[NEW YORK] Xerox Corp will announce Friday that it's splitting itself into two companies, essentially unwinding its largest-ever acquisition, the Wall Street Journal reported, citing unnamed people familiar with the matter.
Famous as the brand behind the copy machine, the now-struggling Xerox will divide itself into one company grouping its hardware operations and another that will house its services business, according to the Journal. Xerox will announce the move when it reports earnings on Friday, the newspaper said. Carl Icahn will be given three board seats on the services company's board, the Journal said.
Sean Collins, a spokesman for Norwalk, Connecticut-based Xerox, had no comment on the report. Mr Icahn didn't immediately respond to requests for comment.
In November, Mr Icahn said he had taken a 7.13 per cent stake in Xerox, in the belief that the shares were undervalued. He said at the time he intended to speak with executives and the board to improve operational performance and pursue strategic alternatives. Xerox said earlier that it was conducting a broad- based review of structural options for the company's business portfolio and capital allocation.
With the split Xerox will basically unravel its purchase of Affiliated Computer Services Inc., which it bought in 2010 for US$6.2 billion.
Xerox shares fell 1.7 per cent in extended trading in New York to US$9.07. They have fallen 13 per cent so far this year compared with a 7.4 per cent drop in the Standard & Poor's 500 Index.