Xerox Pushes Its Slate for HP Board in a New Proxy Filing

Monday’s filing specifically focuses on the Xerox board slate, asserting that supporting its nominees “will send a clear and strong message to the HP board to negotiate with Xerox” on the proposed transition. Xerox adds that voting for its slate will show that shareholders want HP to focus on creating stockholder value, objectively evaluate the Xerox offer, and to negotiate in good faith with Xerox about the proposal.

The filing includes a detailed “ticktock” of events in the relationship between the two companies, similar to, but with interesting differences from a similar timeline laid out in a recent HP filing. Among other things, Xerox asserts that former HP CEO Dion Weisler in conversations with Xerox CEO John Visentin “expressed particular interest in how a board of directors functioned when a company had a large activist involved or was owned or controlled by a private-equity fund.” That is an obvious allusion to investor Carl Icahn, who holds 10% of Xerox shares, as well as 4% of HP’s stock.

According to the filing, “Visentin explained several advantages in each scenario, all of which were primarily derived from a greater focus on results over politics.” In other words, Visentin seem to be saying that having an activist like Icahn hanging around your stock is a good thing.

The filing asserts that Weisler “often expressed frustration with certain members of the HP board, whom he said preferred listening to the sound of their own voice more than helping to facilitate effective and efficient strategic decision-making.” And the filing adds that “Weisler expressed particular concern about his senior leadership team...In one instance, after poor quarterly results caused a precipitous stock price drop, Mr. Weisler attempted to rally the [senior leadership team] and was outraged when he received questions from [them] about whether the poor results would impact bonuses.”

Weisler has since stepped down as CEO over a family health issue.

In the proxy, Xerox also proposes a measure that would repeal any amendments to the company’s bylaws approved by the board but not by shareholders since Feb. 7, 2019. That measure would appear to be targeted at reversing the company’s recent “poison pill” rights offering, which was adopted as a defense against a hostile takeover.

HP shares on Monday were down 9.6%, to $19.36, while Xerox was off 8.5%, to $28.62.

Write to Eric J. Savitz at eric.savitz@barrons.com