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Carl Icahn buys stake in HP, calls for Xerox deal

(Image credit: Image source: Ken Wolter / Shutterstock)

Businessman, investor and philanthropist Carl Icahn has bought $1.2 billion worth of stake in HP Inc and is now calling for the company to merge with fellow printer maker Xerox.

Icahn, who now allegedly owns a 4.2 per cent stake in HP, is calling for a merger of the two companie, as it would “yield big profits” for investors.

Even though an HP spokesperson said the company is aware of his investment and continues to work in the best interest of its shareholders, he did not want to disclose how much stake the businessman has.

Earlier this month, it was reported how Xerox, three times smaller than HP, made an offer weighing $33 billion, in cash and stocks. HP confirmed the bid, but did not disclosed the price.

“I think a combination is a no-brainer,” Icahn was quoted as saying by the Wall Street Journal.

“I believe very strongly in the synergies,” he said, adding that “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.”

With the acquisition, both parties would save $2 billion in costs, Xerox argues. The company is worth approximately $8 billion, while HP’s worth is estimated to be around $24 billion. According to the Wall Street Journal, Xerox will be backed by a “major” bank.

Xerox is a Connecticut-based company that makes large printers and copying machines for businesses. It has an annual revenue of approximately $10 billion. HP is a spin-off from HPE, and deals in smaller printers and printing supplies. It is also one of the largest PC makers in the world, with a revenue of more than $58 billion for the last year.