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Starteepo urges Xerox to review financial services unit and cut leverage
Starteepo, which says it owns a 7.3% stake in Xerox, wants the company to explore options including a joint venture, strategic capital partnership, sale, or alternative financing for its financial services business.
Starteepo, a major shareholder in Xerox, is pushing the company to take steps it says could unlock value, including a strategic review of Xerox’s financial services operation and a significant reduction in leverage, according to Hedgeweek citing a Bloomberg report.
The investor, led by Frantisek Bostl, is asking for greater transparency around the financial services unit that provides customer financing for Xerox products. Starteepo wants the unit’s financial performance reported separately and management to outline its strategy by the company’s third-quarter results, and it is urging Xerox to appoint advisers to run a formal strategic review.
Starteepo’s proposed pathways for the financial services division include a joint venture, a strategic capital partnership, a sale of the business, or alternative financing arrangements. Bostl also argues the unit could be worth as much as $7.69 a share if investors recognized its value, and estimates its plan could drive equity value up to $3.3 billion, or more than $18 a share.
Xerox shares rose as much as 6.9% to $3.55 in early New York trading Tuesday before paring gains to $3.38. The stock has fallen about 13% over the prior year, leaving Xerox with a market capitalization of roughly $418 million.