Pension fund objects to Icahn investment in HP, Xerox

Bloomberg reports the Miami Firefighters Relief and Pension Fund, a Xerox Holdings Corp. shareholder, sued Carl Icahn and an investment vehicle he controls, alleging they bought $1.2 billion worth of HP Inc. shares knowing Xerox was considering acquiring the stock at a premium. The lawsuit filed in New York state court in Manhattan alleges Icahn, Icahn Capital LP and High River Limited Partnership breached their fiduciary duties to Xerox by buying HP stock with the knowledge that “Xerox was either considering making an offer to purchase HP, had already approached HP about a possible merger into or acquisition by Xerox, or of the obvious merits of Xerox’s potential acquisition of HP.”

Icahn Capital is Xerox’s largest shareholder, owning almost 11% of the stock as of September 30. Icahn late that month disclosed that Icahn Capital and High River together owned more than 62.9 million shares of HP, making Icahn the fifth-largest shareholder in the company. Yet, a previous disclosure by Icahn in August listed no HP stock as of June 30. While the date of Icahn’s purchases were not revealed, an analyst speculated two days after the end of the third quarter that an activist investor might be targeting HP shares citing reasons including a “huge spike” in trading volume without an obvious reason, according to the suit.