Xerox Holdings is facing renewed pressure from an activist investor to launch a strategic review of its financial services arm, according to a report by Bloomberg. The move comes as the company, long associated with office printers and copiers, continues to grapple with a declining core business and a share price that has struggled to recover in recent years.
The investor is said to be urging the board to examine options for the division, which provides leasing and financing solutions to Xerox customers. Such a review could potentially lead to a sale, spin-off, or other restructuring of the unit, which is seen as a non-core asset by some shareholders. The push reflects a broader trend in which activist investors target established industrial and technology firms, seeking to streamline operations and return capital to shareholders.
Xerox has not publicly commented on the report. The company, headquartered in Norwalk, Connecticut, has undergone significant transformation efforts under its current leadership, including a pivot towards software and services. However, its traditional printing business continues to face structural headwinds as workplaces shift towards digital documentation and remote operations.
The financial services arm has historically been a stable contributor to Xerox's overall revenue, providing a steady stream of income through equipment leasing contracts. Analysts suggest that separating this unit could allow the core business to focus more sharply on its digital transformation strategy, while also potentially unlocking a higher valuation for the financing operations, which may be valued differently by the market than the parent company's shares.
This is not the first time Xerox has attracted activist attention. The company has previously faced proxy fights and strategic challenges from investors, including a notable attempt to pursue a merger with HP Inc. several years ago, which was ultimately abandoned. The current pressure highlights the ongoing challenges facing legacy technology companies in adapting to a rapidly changing market environment.
Shares of Xerox have traded relatively flat over the past year, underperforming broader market indices. The company's market capitalisation remains modest compared to its historical stature, making it a potentially attractive target for investors seeking to effect change. The outcome of the reported activist campaign could have significant implications for the company's strategic direction and its future capital allocation policies.