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Xerox Splits Into Two Companies, Icahn Not Behind Move (thestack.com)
An anonymous reader writes: Printer and copier maker Xerox has announced its plans to split into two separate publicly traded companies, giving billionaire Carl Icahn three board seats in the settlement. CEO Ursula Burns has now claimed that the decision was not driven in any way by the activist investor. Burns confirmed that the company had begun looking into its structure and portfolio from October 2015, in order to better reflect changes in the market. She added that no conversations with Icahn took place prior to these reviews, or before it made the final call. Xerox will now be divided into a new business process outsourcing company, and a document technology firm. Burns explained that her role, in either company, has not yet been confirmed. However now that the split is being implemented, leadership discussions will be held shortly, she said.
Yeah, I am sure the leadership has not already staked out their territory as this was being hatched. Those magnanimous mother fuckers,,,
wow meto on HP
Interesting post, I'll have to check it out.
It's true, Xerox is splitting into two companies. But the second company is merely going to be a copy of the first one.
Dad, what do you do for a living? I am a Business Process Outsourcer.
From the fine summary:
giving billionaire Carl Icahn three board seats in the settlement
Is Corporate Governance actually supposed to work this way? It sounds like there will be three board members appointed, none of which are independent and who all just do the bidding of Icahn.
Why not just cut two seats and give Carl's new seat 3 votes?
And Then There Were Two - Xerox Copies Self ...with a lead of:
Remember Xerox? Your parents probably did. But now there's two of them to make fun of now that...
Sounds like the villains in a 101 Dalmatians Reboot :-)
Or just duplicated themselves?
Xerox acquired ACS in 2009. Stagnates and splits into hardware and services companies in 2016.
I attribute this to a few dirty little secrets rarely mentioned.
1. People with titles starting with C are risk takers. They try bold moves to move the needle. Rarely does this really bite them in the ass. Even if they are fired in disgrace, they are still usually given a golden parachute to tide them over until the next corporation hires them for more money to try it again.
2. Then there is the problem with the strategy of an old school hardware company trying a big move into solutions or services etc. Namely the barrier to entry for competition is completely different in the two industries. How much it would cost you to start up a manufacturing entity designing, building, and selling an office machine that would even take the bottom role in the industry? Now take a guess at how much it would cost you to open shop reselling an already known name brand software package to businesses in Anytown USA. The difference in cost for opening a viable ECM reseller shop compared to launching a viable printer manufacturing business is several orders of magnitude.
3. The hardware business does not survive selling printers, copier, etc. They keep the doors open because you have to run the thing. To paraphrase an old presidential candidate, its the annuity stupid. You pay for your device output by the page. This may be per copy or buying ink or toner. In any event the money made on the actual hardware sale often pales in comparison to the profit they make once it is in place. Even though most manufacturers have a direct selling arm, the corporate mother ship does not care who sells the hardware, as long as someone does, and keeps you filling the annuity stream.
I'll agree that there is an annuity component to the software business, but unless your software dies at the expiration of your contract, many businesses will opt out of your game and continue to run their existing software which is good enough while you get no additional money. See Windows XP and Office 2010. Maybe your company decides to go with a subscription model. No money, software no workee. This may play well in top tier businesses but in the bottom 95%, there is always a lower cost alternative to steal your business 5 years from now.
Sure the paperless office is just around the corner, but its been circling the drain for nearly 30 years. Most of the weak have been weeded out. Often the paperless office means the company which creates the content no longer has to pay to print and ship the document to you. But as often as not, it ends up on paper, its just the end user who pays the cost of printing. Maybe your business does not fall in this category and you are all iPad, all the time. But industry wide, printed page volumes have leveled off. Maybe they shifted to a different industry, segment, use etc. But make no mistake marks still go on paper. Unfortunately for Xerox, Ursula Burns long ago lost interest in marks on paper and gave up on large swatches of the business. Almost all products sold with Xeroxs name on them are manufactured by Fuji, not Xerox, and Xerox has abandoned all but a scant few of their largest customers to their dealers. You cant reap the golden eggs when you have sold the goose.
That's a bullshit term his PR people have come up with and for some damn reason the media, Slashdot included, seem to play along. Call him what he is: A corporate raider. He likes to get controlling shares of companies, load them with debt, sell of their assets, and leave them to rot.
So his stake in Xerox is 9.12%: "Carl Icahn (Trades, Portfolio) increased his shareholding of Xerox XRX +0.00% (NYSE:XRX) in January, a filing revealed Friday as the company announced increased partnership with him and major changes in line with his vision for the company.
Icahn’s funds purchased an additional 5,740,871 during the period from Jan. 4 to Jan. 8, at an average price of $10.05 per share. According to the filing, the purchases brought his total stake in the company to 92,377,043 shares, or 9.12% of its shares outstanding, and a boost of 12.2% from his last disclosure in December.
Icahn’s three selected board members will join a nine-member board of directors for the BPO company. The current board will begin searching for an external candidate for CEO of the BPO company and also allow Icahn to choose a representative to be involved in the search process, Xerox said.
[...]
“Happy to announce we reached an agreement with $XRX re: separation into two independent public companies,” Icahn said on Twitter TWTR +0.00% Friday. “We believe the separation will greatly enhance value for $XRX shareholders. I applaud and respect Ursula Burns for doing what she believes shareholders want – as @Donahoe_John did with $Ebay EBAY +0.00% and $PYPL. I hope and believe the results will be just as good for XRX shareholders.”
Icahn’s tweets referred to the division of Paypal (NASDAQ:PYPL) from eBay (NASDAQ:EBAY) that he prompted last year and which became complete in July. Since they began trading separately on July 20, eBay’s shares have fallen 18.3% and Paypal Holdings shares have declined 6.7%."
-- Forbes link (sorry folks, but that's where the info was)
Icahn himself says he "reached an agreement" with Xerox. The guy is a famous corporate raider with a significant stake in the company. Whoever said Icahn had nothing to do with it is delusional or lying.
It's warm, slightly curly and fainter, and has vertical white bars running down it.
And here I thought they were in Rochester, not Buffalo.
Xerox is probably a lost cause. Their failure to license solid ink technology, and instead try to hoard it for themselves, has probably cost them tens if not hundred of millions in revenue. They are an old fuddy-duddy company, that has long lost their way and have been living on borrowed time granted them by their towering forebearers ever since. I'll be surprised if they last another decade.
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