By Alistair Barr, MarketWatch
NEW YORK (MarketWatch) — Xerox Corp. may be an attractive acquisition target for larger technology companies, Alexander Roepers, head of Atlantic Investment Management, said Wednesday.
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XRX 11.07, -0.01, -0.09%
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Despite its recent expansion, Xerox /quotes/comstock/13*!xrx/quotes/nls/xrx (XRX 11.07, -0.01, -0.09%) is a “very attractive take-out candidate” for larger rivals such as International Business Machines /quotes/comstock/13*!ibm/quotes/nls/ibm (IBM 140.37, +0.52, +0.37%) , Hewlett-Packard Co. /quotes/comstock/13*!hpq/quotes/nls/hpq (HPQ 42.21, +0.86, +2.08%) or Dell Inc. /quotes/comstock/15*!dell/quotes/nls/dell (DELL 14.13, -.00, -0.01%) , the investor said in a speech at the Value Investing Congress in New York.
Tech companies have a lot of cash and some investors expect that money will be put to work in dividends, stock buybacks and acquisitions.
On Tuesday, Lee Ainslie of Maverick Capital Management told an audience at the Value Investing Congress that Dell Chief Executive Michael Dell may make a bid to buy the computer maker he founded. See full story here.
Xerox itself was recently in acquisition mode, buying Affiliated Computer Services Inc. That move should help the company generate annual earnings growth of about 20% in the next few years, Roepers said.
Atlantic Investment Management is a $1.5 billion investment firm that takes big stakes in a few companies and tries to work with executives on strategic changes. The firm currently owns about seven stocks and Xerox is one of them.
Xerox has a market value of $15.4 billion. On Wednesday, the stock closed down cents at $11.09, and set its 52-week high of $11.72 on April 23.
Alistair Barr is a reporter for MarketWatch in San Francisco.
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