Xerox Corp. (NYSE: XRX) has been in deep trouble for years. It did not make the train traveling toward the digital storage and sharing of documents and corporate data. According to rumors in The Wall Street Journal and other media, two large shareholders have begun to pressure the Xerox board to sell the company, which may be the only way Xerox has a viable future.

According to the reports, Carl Icahn and Darwin Deason own just over 15% of Xerox shares, which may not be enough to force the board’s hand. Yet, they will use the leverage they apparently have to drive an attempt to find a buyer. Xerox, however, may be in enough trouble that a sale at over its current stock price may not be a possibility.

One of Xerox’s problems is that it has been broken into two pieces. A year ago, Conduent Inc. (NYSE: CNDT) was spun out. It describes itself as a “business process services” company, which makes it more of a consultancy than a seller of hardware. Xerox retained the hardware business, which sells products that may have been useful to businesses a decade ago but are no longer.

Since the spin-off, Xerox’s stock has posted very modest performance, up 15% in the past year to $32. Over the same period, the S&P 500 is up 24% to 2,465. That makes the Xerox market cap about $8 billion. A buyout would probably need to be for $10 billion, if the board presses hard for a premium. In its most recently reported quarter, Xerox revenue dropped 5% from the same quarter last year to $2.5 billion. Per-share earnings were up 1.5% to $0.67. Operating margins were a minuscule 12.2%.

Presumably Icahn and Deason believe that Xerox can find a buyer that can cut Xerox expenses via synergies. That will not help increase revenues. Ultimately that is what would make the company valuable. And it will be a daunting job.

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