Billionaire Investor Deason Files Lawsuit to Block Xerox Split into Two Companies

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The Wall Street Journal has just reported that Xerox’s largest individual shareholder is suing to block the split of Xerox into two companies by the end of this year, one of which will be called Conduent and will be devoted to business-process outsourcing, and the other of which will retain the Xerox brand name and be devoted to printers, scanners, and copier/MFPs, as well as their related supplies and solutions, and document outsourcing.

According to The Wall Street Journal, Xerox’s largest individual shareholder, billionaire Darwin Deason, has filed a lawsuit seeking to block Xerox from splitting into two companies. Deason is said to have owned a 6.1 percent share in Xerox at the beginning of the year, according to FactSet. He’s is said to have filed the lawsuit on October 11th in a U.S. District Court in Dallas, claiming that Xerox “has violated an agreement it struck with him in 2009” at which time Xerox acquired his business, Affiliated Computer Services Inc., for about $6 billion.

A Xerox spokesman said the lawsuit was “meritless” and that Xerox is “continuing to move forward with our planned separation, which we expect to complete on schedule.”

The Wall Street Journal articles states:

“In his lawsuit, Deason claims Xerox would exchange $300 million worth of preferred shares Mr. Deason owns for a stake in the legacy business instead of Conduent.”

The lawsuit also states: “The reorganization as currently proposed will trap Mr. Deason’s Series A Preferred investment position in the post-Reorganization Xerox—a low-growth document-technology business that will have a considerably diminished outlook and credit profile—without any stake in the valuable BPO (business-processing outsourcing) business at Conduent.”

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