Xerox announces distribution of pro rata warrants to benefit shareholders

Xerox has recently announced a strategic move to enhance shareholder value and hasten the process of deleveraging through a pro-rata warrant distribution. With approval from the Board of Directors, Xerox is set to distribute warrants to holders of its common stock, Series A Convertible Perpetual Voting Preferred Stock, and Convertible Senior Notes due by 2030. This distribution is a part of Xerox’s broader strategy to optimize its balance sheet and capital structure to generate sustained value for shareholders.

The distribution of warrants serves as a unique opportunity for shareholders to capitalize on their existing ownership by receiving warrants in proportion to their shares. This arrangement allows shareholders to exercise, hold, or transfer these warrants, providing them with a flexible pathway to reap the benefits of Xerox’s ongoing Reinvention. By allowing shareholders to exercise these warrants through cash payment or eligible Xerox debt instruments, the company aims to reduce leverage, maintain liquidity, and fortify its balance sheet, thereby supporting its long-term value creation goals.

The transaction itself is set to take place around February 11, 2026, with holders of common stock, Series A Preferred Stock, and Convertible Notes all being eligible to receive these warrants based on a defined ratio. Each warrant entitles its holder to purchase one share of Common Stock at an exercise price of $8.00, and these warrants are set to expire two years from the Distribution Date unless an Early Expiration Price Condition is met.

This strategic move by Xerox is designed to not only enhance shareholder value but also catalyze the process of deleveraging. The warrants will be listed for trading once an application to do so is approved, offering shareholders an additional avenue to capitalize on their investment. Early expiration of these warrants can occur if the volume-weighted average price of Xerox common stock hits certain conditions within a specific timeframe, ensuring an accelerated expiry if necessary.

The exercise mechanics of these warrants are designed to be flexible, allowing holders to either exercise them using cash or designated Xerox debt securities. Certain Xerox debt instruments have been designated as eligible for exercise, providing another innovative method for shareholders to capitalize on their warrants and contribute to Xerox’s deleveraging efforts. This flexibility is a key component of Xerox’s commitment to optimizing its capital structure and balance sheet.

For further guidance on the warrant distribution, shareholders are urged to refer to the warrant agreement and accompanying investor materials available on Xerox’s website. In this endeavor, Xerox has enlisted the services of B. Dyson Capital Advisors as Exclusive Financial and Warrant Structuring Advisor, with legal counsel provided by Kirkland & Ellis LLP. It is essential to note that this warrant distribution is for informational purposes only and does not constitute an offer to sell or buy securities. The specifics of the warrants and underlying common stock will be made public through SEC filings as per regulatory requirements.