This Week in Imaging: Your Move, Carl Icahn

Photo credit: Kathy Wirth

With Fujifilm’s purchase of a majority interest in Xerox, and Xerox’s merger with Fuji Xerox announced this week, one question is how will billionaire activist Carl Icahn respond? In the last several weeks, Ichan has been demanding Xerox reveal its discussions with Fujifilm and calling for the removal of Xerox leadership – specifically the replacement of Xerox CEO Jeff Jacobson. Now, under the proposed deal, Jacobson will be CEO of the combined Xerox-Fuji Xerox, which will simply be known as Fuji Xerox.

Under the proposed deal, which must be approved by Xerox shareholders, Xerox shareholders will receive a $2.5 billion special cash dividend, or approximately $9.80 per share, and 49.9 percent of the combined company, with Fujifilm to pay $6.1 billion for its 50.1-percent controlling interest. Will Icahn go along with this, or will he mount a campaign to block the sale? Will he argue that Fujifilm got its controlling interest in Xerox too cheaply?

In a conference call with investors, Jacobson said Xerox hadn’t yet talked to its largest shareholders – Icahn, and Darwin Deason, who Icahn recently recruited in his battle with Xerox – about the deal.

According to The Street, “people familiar with the situation” says Icahn is studying the deal and evaluating his options. His initial reaction is said to be that Fujifilm underpaid for its controlling interest, and that “Xerox shareholders should have gotten a much better price when considering the synergies between the two companies.” He also appears concerned about “what protections Xerox shareholders will have after they become 49 percent holders of the new Fuji Xerox.”

Icahn first rose to prominence in 1985, when he took over the TWA airline. since then, however, he has tried to take over and break-up RJR Nabisco and Time Warner – failing both times, but reaping hefty profits.

Stay tuned.

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