Investing.com -- Xerox Corp (NASDAQ: XRX) is facing fresh shareholder intervention after activist investor Starteepo built a 7.34% stake in the office equipment maker and demanded a formal strategic review of its financial services division. The Prague-based alternative investment manager sent a letter to the company’s board calling for immediate balance sheet deleveraging, stricter capital discipline, and greater financial transparency, according to Bloomberg News.

Starteepo, led by investor Frantisek Bostl, argued that Xerox’s financing unit alone could be worth up to $7.69 per share, more than double the company's total market value. To unlock that value, the firm is urging management to begin separately disclosing the unit's financials and outline a clear operational strategy no later than its third-quarter earnings report.

Beyond improved reporting, the activist is pressing Xerox to retain advisers to evaluate options for the financing arm, including potential joint ventures, strategic capital partnerships, or a outright sale. Starteepo suggested adopting an optimized capital structure where a third party provides portfolio funding while Xerox maintains customer relationships, citing similar frameworks used by peers such as HP and General Electric.

The hedge fund, which began building its position in May before expanding its holdings in July, projects these operational changes could push Xerox’s equity value to $3.3 billion, or more than $18 per share. Bostl emphasized that a deleveraged balance sheet would better position the print pioneer to command a premium valuation and actively participate in broader industry consolidation.

This latest push echoes historic activist pressure on Xerox, most notably from Carl Icahn, who successfully pushed for board representation and a corporate split into two public entities starting in 2015. Icahn ultimately exited his position in 2023 when Xerox repurchased his remaining stake for $542 million.

Against the backdrop of a 13% share decline over the past year that reduced its market capitalization to roughly $418 million, Xerox shares lifted 1.8% in premarket trading following the report. Investors are now watching closely to see if management will embrace the proposal to catalyze a turnaround.