STARTEEPO Comments on Xerox’s Disappointing Third Quarter Results

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Postmedia has not reviewed the content. by Business Wire STARTEEPO Comments on Xerox's Disappointing Third Quarter ResultsAuthor of the article:Company’s Third Largest Shareholder Welcomes Actions Taken to Prioritize Debt Reduction and Increase Transparency for XFS Business UnitTHIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountCalls on Xerox Board to Explore Strategic Alternatives for XFS and CompanyPRAGUE — STARTEEPO SICAV a.s. (“STARTEEPO”), which beneficially owns 7.34% of Xerox Holdings Corporation (“Xerox” or the “Company”) (NASDAQ: XRX) in stocks and options, today commented on the Company’s third quarter results announcement.František Bostl, STARTEEPO Founder and Chairman of the Board, said:This advertisement has not loaded yet, but your article continues below.“Since announcing our substantial investment in Xerox earlier this year, we have privately and publicly encouraged the Xerox Board of Directors to take bold action to address the persistent gap between Xerox’s share price and the opportunity we see to unlock significant shareholder value. In light of the disappointing quarterly results and reduced guidance announced yesterday, we intend to significantly intensify our existing dialogue with management and the Board.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againIt is clear from the third quarter results that, in 2027, Xerox must execute more effectively and make greater progress on cash flow recovery and deleveraging. In that regard, we welcome the Company’s prioritization of debt reduction and balance sheet improvement and recognize management’s ongoing efforts to refinance and manage liabilities. We support the suspension of the common and preferred dividends as a responsible decision to preserve cash.We were also pleased to see Xerox respond to our request for increased transparency around the financial performance of Xerox Financial Services (XFS) by providing detailed information about the business unit in the Company’s third quarter presentation. We regard XFS, which finances customer equipment purchases, as the hidden gem in Xerox’s portfolio, and believe that through this improved transparency, investors will be able to better understand the value of the business unit.However, we believe it is imperative at this juncture that the Company’s Board and management team take more aggressive steps to increase shareholder value, including exploring strategic alternatives for XFS and potentially Xerox as a whole. These strategic review processes could be conducted in parallel with the ongoing efforts to improve the business and pay down debt. We offer our transaction advisory expertise, capital markets experience, and European relationships in support of these efforts.In addition, we believe there is a near-term opportunity for Xerox to restructure its outstanding warrants to facilitate a meaningful debt-for-equity exchange before year-end and use the proceeds to help deleverage the Company. Through its own participation in warrant exercises, STARTEEPO has already helped Xerox retire several million dollars of outstanding debt principal, demonstrating the potential of this mechanism. This approach could accelerate debt reduction without using the Company’s cash, and we believe the benefits of lower leverage would outweigh the dilution associated with issuing additional shares.This advertisement has not loaded yet, but your article continues below.As we have said previously, we believe that successful deleveraging of Xerox’s balance sheet will likely lead to a re-rating of the stock and better position Xerox to participate in industry consolidation and command a premium valuation. We have previously stated our belief that Xerox could be worth roughly $3.3 billion, or $18 per share, based on precedent transactions, should it decide to pursue additional strategic alternatives in the future. While we believe this remains achievable, realizing this potential will require bold and decisive action from Xerox’s management and Board. Without a more aggressive approach to deleveraging, operational improvements, and strategic alternatives, we believe this value could progressively erode over time, making timely action increasingly critical.We remain convinced of Xerox’s long-term value and will continue to evaluate our investment exposure and how we can best assist the Company in creating shareholder value.”Shareholders interested in learning more about STARTEEPO’s perspectives on Xerox can visit: www.starteepo.com/xerox.STARTEEPO SICAV a.s. is an alternative investment fund based in Prague, Czech Republic, focused on identifying high-conviction opportunities in public equity markets. The firm applies a fundamental, long-term investment approach, with a focus on disciplined analysis and constructive engagement.This communication expresses solely the opinion of STARTEEPO SICAV a.s. (“STARTEEPO”) and its affiliates and not any other party. This communication is for informational purposes only and does not constitute investment advice, a recommendation, or offer to buy or sell any securities. STARTEEPO’s opinions stated herein are based on publicly available information and its own analyses. STARTEEPO may, at any time and without notice, buy, sell, reduce, increase, or otherwise change its investment position, including for reasons that may be inconsistent with the views expressed in this communication. Investing in securities involves significant risks, including the potential loss of the principal amount invested. Past performance is not a reliable indicator of future results. 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