WHO WANTS TO BUY …….LEXMARK CORP ?

[Anonymous]

Xerox not interested in Lexmark International bid, CEO says
Xerox, the No. 1 maker of advanced color printers, will not bid for ailing Lexmark International, said CEO Anne Mulcahy.
“There’s nothing that Lexmark would bring to the table,” she said during an investor call to discuss 3Q results for listed Stamford, Connecticut-based Xerox. Rather, Xerox will target mid-range targets in software, distribution and services, she said.Xerox, with a market capitalization of USD 15.9bn, reported 3Q cash and investments of USD 848m. The company reported 3Q net dropped 53% to USD 254m because of prior-year tax benefit, as revenue rose 12% to USD 4.2bn.Speculation concerning listed Lexmark, based in Lexington, Kentucky, has swirled the past two years and prompted a 2006 review of whether the No. 2 maker of office printers should consider an LBO, former director BC Ames said in an earlier interview. Ames was also vice chairman of Clayton, Dubilier & Rice, the P/E firm that bought the company from listed IBM in 1991. Lexmark’s IPO was in 1995.In July, when Lexmark announced it would miss 2Q revenue and income targets, CEO Paul Curlander said he was not exploring an LBO. The company has not yet reported 3Q results.

Lexmark, with a market capitalization of USD 3.98bn and enterprise value of USD 3.6bn, has seen a 2.1% boost in its shares on the NYSE this month. The shares are down 32% over the past year. The company’s price-earnings ratio is only 11.53, compared with Xerox’s 14.5 and 18.4 for listed Hewlett-Packard, the biggest maker of PC printers.Another prospective suitor frequently mentioned is listed Dell, the No. 2 PC maker, which has long distributed Lexmark printers under its own label. Dell, though, has been ensnared by internal and US Government probes of its financial reports, which have ended. The company said it expects to file complete revised reports by next month.CEO Michael Dell, who took back the past in January, has said he wants to focus the company more on services, which would likely rule out a Lexmark purchase. Listed Eastman Kodak, which entered the PC printer market this year, has also been mentioned as a suitor, but CEO Antonio Perez has said he is not interested in buying another company to better compete against Hewlett-Packard.

Lexmark’s biggest shareholder has long been listed Goldman Sachs, with a nearly 10% stake, but hedge funds including Renaissance Technology, DE Shaw and Arrowstreet have bought a combined 13% stake this year. Others have smaller positions.Xerox, which acquired listed Global Imaging Systems of Florida for USD 1.5bn in the first quarter, its biggest-ever acquisition, does not plan to make such large ones ahead, CEO Mulcahy said. 

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October 22, 2007 at 11:33 AM