Activist investor Carl Icahn is the target of a lawsuit by a shareholder of Xerox Holdings Corp, after the latter alleged that Icahn bought stock in HP Inc. while knowing that Xerox planned to offer a premium to buy HP stock.

According to a Reuters report, the Miami Firefighters Relief and Pension Fund filed the lawsuit against Icahn and an investment vehicle he controls.

Icahn is the largest shareholder in Xerox, owning 11 percent of the stock, and as of September 30 also owned 4.2 percent of HP as its fifth largest shareholder.

In November, HP rejected an unsolicited takeover offer from Xerox, according to Bloomberg. However, Icahn, knowing that Xerox was considering the HP move, urged HP to accept Xerox's offer.

A WHEC report says that Icahn bought the HP stock—$1.2 billion worth—with knowledge of the proposed takeover in mind.

According to Bloomberg, in Icahn's August disclosure, no HP stock ownership as of June 30 was listed. It also says that the suit alleges that "Icahn, Icahn Capital LP and High River Limited Partnership breached their fiduciary duties to Xerox by buying HP stock with the knowledge that 'Xerox was either considering making an offer to purchase HP, had already approached HP about a possible merger into or acquisition by Xerox, or of the obvious merits of Xerox's potential acquisition of HP.'"

Axios reports that HP's rejection of Xerox's November offer was unanimous, because its board believed "the bid undervalued HP and included too much uncertainty and debt."

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Icahn sued by pension fund over proposed Xerox-HP deal

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