Yahoo Finance Carl Icahn Discloses 10 Percent Stake in Xerox Spinoff Conduent
- By Holly LaFon
Carl Icahn (Trades, Portfolio), an investor known for effecting change at companies he invests in, today reported the product of his recent division of hardware company Xerox (XRX) - a haul of 19,806,00 shares of the new services company, Conduent (CNDT).
The intrinsic value of CNDT
Icahn had begun amassing his stake totaling 99,030,026 shares of Xerox in the fourth quarter of 2015. By Nov. 8, the company announced its decision to divide into two entities and issue to shareholders one share of Conduent for every five shares of Xerox. Icahn received his stake in Conduent, which is one-fifth of his stake in Xerox, in the distribution and effectively owns 9.77% of the new company.
Conduent shares tumbled by 9.8% since they began trading on Jan. 3, priced at $13.44 at close Tuesday. Xerox's shares have risen 1% year to date, closing at $7.03.
Conduent, a $2.59 billion company, the business services side of Xerox, offers customer care, transportation services, health care and digital payments. Xerox will still focus on digital print and technology services. Icahn also owns 9.77% of Xerox, after ramping up his holding through the first half of 2016.
The separation represents the culmination of Icahn's efforts to unlock value at Xerox that began in late 2015. With the purchase of his stake, he also installed three members to its board.
Xerox, a $7.09 billion company, had $11 billion in revenue in 2015, while Conduent, with a market value of $2.59 billion, had revenue of about $7 billion.
Icahn gave his approbation of the separation in a series of tweets when it was announced last year.
1/4 Happy to announce we reached an agreement with $XRX re: separation into two independent public companies: https://t.co/KoRmzNkzTb
-- Carl Icahn (Trades, Portfolio) (@Carl_C_Icahn) January 29, 2016
2/4 We believe the separation will greatly enhance value for $XRX shareholders
-- Carl Icahn (Trades, Portfolio) (@Carl_C_Icahn) January 29, 2016
3/4 I applaud and respect Ursula Burns for doing what she believes shareholders want - as @Donahoe_John did with $EBAY and $PYPL
-- Carl Icahn (Trades, Portfolio) (@Carl_C_Icahn) January 29, 2016
4/4 I hope and believe the results will be just as good for $XRX shareholders
-- Carl Icahn (Trades, Portfolio) (@Carl_C_Icahn) January 29, 2016
Icahn, who has worked on Wall Street for almost for more than half a century, joined President Donald Trump's administration last month as special adviser to the president on regulatory reform. He also has activist positions in Herbalife (HLF), Hertz (HTZ) and Enzyne (ENZN), among others.
This article first appeared on GuruFocus.
The intrinsic value of CNDT
