Xerox Shareholder Pushes for Activist Changes at Company

(Bloomberg) -- A significant shareholder in Xerox Holdings Corp. is pushing the company to take action to unlock shareholder value and is asking for a strategic review of its financial services business.

Starteepo, led by investor Frantisek Bostl, said it has taken a 7.34% stake in Xerox, according to the letter sent Monday to the board that was reviewed by Bloomberg News.

The Prague-based alternative investment manager also called on the company to deleverage its balance sheet and be disciplined around capital allocation, according to the letter.

Bostl wrote in the letter that Xerox's financial services unit can be worth as much as $7.69 per share, more than double the current share price for the entire company.

A representative for Xerox didn't immediately respond to a request for comment Tuesday.

Norwalk, Connecticut-based Xerox makes printers, scanners, supplies and accessories. Its shares have fallen about 13% over the past year, giving the company a market value of about $418 million.

Xerox's shares closed at $3.32 on Friday in New York trading.

Starteepo said Xerox should provide more transparency on its financial services business, which provides financing for its products, according to the letter. The investor is pushing management to disclose the unit's financials separately in earnings and communicate its strategy for the unit no later than its third-quarter earnings, which it said can help the market recognize the unit's value.

Starteepo also wants the company to hire advisers to carry out a formal strategic review of the unit, which would ideally include looking at a joint venture, strategic capital partnership, a sale and alternative funding structures, the letter said.

Starteepo disclosed in May that it has taken a significant stake in Xerox, saying at the time that the company "represents an interesting investment opportunity." Starteepo continued to increase its stake in Xerox in July.

"By every measure, the business has improved in the past four months," Bostl wrote in the letter. "Despite all this progress, however, Xerox's enterprise value, which has consistently failed to capture the company's potential, is even lower today than when we first made our position public."