HP accused of 'rearranging the deck chairs on the titanic' as pressure to negotiate with Xerox intensifies

Carl Icahn pressures HP shareholders to push for a deal

HP has been criticised for failing to back Xerox's takeover bid by activist investor Carl Icahn, who slammed the vendor's board for their "history of underperformance and missteps.

Icahn, who is Xerox's largest shareholder, has built a 4.2 per cent stake in HP over recent months and is publicly backing a merger between the print pair.

Xerox launched a takeover bid for HP last month, but the HP board said the deal undervalued the company. Xerox also claimed that HP declined to participate in mutual due diligence.

Xerox has since said it will take its offer direct to HP shareholders.

In an interview with Bloomberg, Icahn urged shareholders to pressure the board into negotiating with Xerox.

"I can say without exaggeration that the combination of HP and Xerox is one of the most obvious no-brainers I have ever encountered in my career; one where activism should not even be necessary at all because the merits of the combination are so obvious to everybody involved," he said.

"It is absurd for the HP board and management team, with such a history of underperformance and missteps, to claim to have had a sudden epiphany and now expect shareholders to trust them to execute a standalone restructuring plan.

"I cannot believe that the recalcitrance of HP's board is driven by any real confidence in its standalone restructuring plan, which the market, shareholders and analysts met with extreme indifference."

He added that HP's standalone plans to turn around its fortunes amount "to little more than rearranging the deck chairs on the Titanic".

HP has maintained that Xerox's bid is not a fair valuation, and also raised questions over Xerox's business model and recent exit from a joint venture with Fujifilm.