Corporate raider Carl Icahn prevents sale to Fujifilm by cutting last-minute deal with Xerox.
Between them, Icahn and Deason now own 15pc of Xerox.
‘Absent a viable, timely transaction with Fujifilm, the Xerox board believes it is in the best interests of the company and all of its shareholders to terminate the proposed transaction’
– XEROX BOARD
As shareholders, they opposed the proposed $6.1bn takeover of US firm Xerox by Fujifilm.
For its part, Fujifilm is disputing the latest deal and has warned it could go legal.
“We do not believe that Xerox has a legal right to terminate our agreement,” Fujifilm said in a statement.
“We are reviewing all of our available options, including bringing a legal action seeking damages.”
Copying machine error
Xerox said that the agreement to combine the company with Fuji Xerox was being prevented due to, among other things, the failure by Fujifilm to deliver the audited financials of Fuji Xerox by 15 April.
Under the terms of the new deal with Icahn and Deason, Xerox has appointed five new members to its board of directors, while five previous board members have resigned.
In addition, Xerox CEO Jeff Jacobson will resign from the company and the board.
In a statement, Xerox said: “Over the past several weeks, the Xerox board has repeatedly requested that Fujifilm immediately enter into negotiations on improved terms for a proposed transaction. Despite our insistence, Fujifilm provided no assurance that it will do so within an acceptable timeframe.
“The Xerox board believes that the transaction cannot reasonably be expected to be completed under these circumstances, particularly given the court’s injunction of the transaction and the lack of shareholder support for the transaction on current terms, as well as the unresolved accounting issues at Fuji Xerox.
“The board also considered the potential instability and business disruption during a proxy contest. Absent a viable, timely transaction with Fujifilm, the Xerox board believes it is in the best interests of the company and all of its shareholders to terminate the proposed transaction and enter a new settlement agreement with Icahn and Deason. Under the agreement, the Xerox board will be reconstituted to determine the best path forward to maximise value for Xerox shareholders.”