Carl Icahn spoke at Delivering Alpha in New York September 13, 2016.
David A. Grogan | CNBC
Activist investor Carl Icahn has bought a $ 1.2 billion stake in HP Inc and is pushing for the merger of the personal computer with printer maker Xerox, claiming that a trade union could make big profits for investors, The Wall Street Journal reported Wednesday.
Icahn, which owns a 10.6% stake in Xerox, now owns a 4.24% stake in HP, the journal said.
A spokesman for HP told Reuters that the company is aware of Icahn's investment and is committed to doing what is best for all of HP's shareholders. HP did not disclose how much Icahn owns in the PC manufacturer.
Xerox provided approximately $ 33 billion in cash and shares for HP, a company more than three times larger than Xerox, Reuters reported last week. HP confirmed the bid but did not disclose the offer price.
"I think a combination is a no-brainer," it was quoted by Icahn as saying by the Journal.
"I strongly believe in the synergies," he said, adding that "there is likely to be a choice between cash and shares, and I would much rather have the stock, provided it is a good management team."
Xerox believes it can achieve at least $ 2 billion in annual cost synergies by creating gigantic office supplies, a source told Reuters last week.
The billionaire told the Journal that his team started looking at HP in late February, and that he bought the company's shares from late April to mid-August, though he did not. Have a deal with Xerox in mind as he began to accumulate the shares.
Icahn said he believes a combined company benefits both shareholders, given the potential for cost savings and promoting a more balanced portfolio of print services, WSJ Repor ted.
This is not the first deal that Icahn has tried to orchestrate by getting a small company to buy a larger company.
In June, US casino operator Eldorado Resorts Inc agreed to acquire major peers of Caesars Entertainment Corp for $ 1
Icahn and Xerox did not immediately respond to Reuters request for comment late Wednesday