Xerox Corp. (XRX, Financial) announced changes to its board of directors on Dec. 11, making room for new nominations from activist investor Carl Icahn (Trades, Portfolio).
The Connecticut-based technology company announced Jonathan Christodoro, a former managing director of Icahn Capital LP, resigned from its board. As a result of his resignation, the standstill arrangement the company entered with Icahn Group in June of 2016 was terminated, allowing the guru to nominate four candidates.
A standstill agreement, as defined by Investopedia, is a pact that “stalls or stops the process of a hostile takeover.” The terms of these agreements typically include the target company either offering to repurchase shares from the bidder at a premium or asking them to limit their holdings.
Christodoro has been a member of the board since June 27, 2016, when the Icahn Enterprises LP (IEP, Financial) leader appointed him. Icahn’s firm is Xerox’s largest shareholder with a 9.72% stake. According to GuruFocus, Icahn has gained 10% on the investment since the fourth quarter of 2015.
While Xerox did not disclose the names of the candidates, they will be reviewed by the company’s corporate governance committee and be voted on at its 2018 annual shareholders meeting, which has not yet been scheduled.
In a statement, Xerox said its board and management team are committed to “enhancing shareholder value and will continue to take the necessary actions to achieve this objective.”
Following the announcement, Xerox shares were up 0.24% Monday morning around $29.66 per share with a market cap of $7.53 billion, a forward price-earnings (P/E) ratio of 8.48, a price-book (P/B) ratio of 1.43 and a price-sales (P/S) ratio of 0.74. GuruFocus estimates Xerox has gained nearly 30% year to date.
Other gurus invested in Xerox include Jim Simons (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Bernard Horn (Trades, Portfolio) and Jeremy Grantham (Trades, Portfolio).
Disclosure: I do not own any stocks mentioned.
