Billionaire investor Carl Icahn has bought 7.13 percent stake in Xerox Corp. Carl Icahn's statement terming the shares of Xerox are undervalued has triggered the price rise in stock. The stake sale will pave the way for strategic changes at Xerox Corp. Icahn will represent on Xerox's board and is expected to take up enhancing of operational performance.

Activist investor Carl Icahn has become the second largest investor in Xerox Corp after Vanguard Group Inc, which holds 8.37 percent stake in the 109-year old manufacturing company of printers and copiers. Xerox Corp's shares rose 7.6 percent after the purchasing of stake by Carl Icahn.  

Icahn has recently bought stakes in American International Group and Freeport McMoran Inc. Icahn after closing the stake purchasing deal, said that he would be looking to getting representation on the board and taking up strategic alternatives as well.

According to a regulatory filing, Icahn will take up several factors including improving operational performance and strategic alternatives. Icahn will also represent on the board. The main reason for Icahn's statement saying undervalued shares is that the steep drop of 22 percent in share price this year.

Xerox in a message to shareholders said: "Xerox welcomes open communications with shareholders and values constructive dialogue. Our board and management team are committed to improving performance and creating value for shareholders and will continue to take the actions to advance these objectives."

However, market analysts are clueless over the role to be played by Icahn. "I like Icahn. He has done well, but I just don't know what he can do here," said Ivan Feinseth, an analyst at Tigress Financial Partners LLC.

Some analysts opine that several issues are there for Icahn to delve upon. For instance, equity stake selling in joint venture Fuji Xerox and spinning off documents business and IT services, he said.

In a statement, Sean Collins, spokesperson at Xerox, said, "We're aware that Carl Icahn has made an investment in the company. Xerox welcomes open communications with shareholders and values constructive dialogue."

The IT services business of Xerox provides business process outsourcing (BPO). The document outsourcing business includes sales of printers and copiers. Susquehanna Financial puts a valuation of Xerox at $13 per share, $9 weighted on the documents business and $3 on the services business and the remaining on the Fuji Xerox business.

Icahn has earlier successfully led the spin-off exercise at eBay Inc, PayPal Holdings Inc and Manitowoc Company Inc. Xerox shares added 7.5 percent to $11.56 on New York Stock Exchange (NYSE). The stock recorded a 23 percent rise in extended trading after Icahn's filing.