Other Copier Company Said to Have Been Considering Merger with Xerox

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According to The Street, a source has told The Street’s sister publication, The Deal, that HP Inc. had been “sniffing around Xerox” prior to the proposed Xerox-Fuji Xerox deal. The Street says that activist investor Carl Icahn and fellow Xerox shareholder Darwin Deason, both of whom own a combined 15-percent of Xerox shares, could ultimately push for a Xerox-HP Inc. combination.

Over the weekend, Deason amended his lawsuit against Fujifilm, Xerox CEO Jeff Jacobson, the Xerox board of directors, and former Xerox CEO Ursula Burns, charging that the Xerox board was seeking to replace Jacobson and that Jacobson continued negotiations with Fujifilm even though the Xerox board to stop those negotiations.

In Deason’s complaint, he refers to the president of another company making an inquiry about “combining” with Xerox, but the name of the president and company are redacted. Both Deason and Icahn have argued that the proposed Xerox-Fuji Xerox deal under-values Xerox, and that Xerox shareholders would receive more value if it was sold to another printer/copier company, or to a private-equity firm.

According to The Hour, the Xerox board was supposedly considering a former IBM and HP executive, John Vistentin, to replace Jacobson. Last month, Icahn recruited Vistentin to help stop his bid to halt the proposed Xerox-Fuji Xerox merger.

Our Take

While these new allegations are interesting, it’s important to note that last year, HP Inc. had just completed its purchase of Samsung’s printer business for $1.05 billion. Was HP Inc. ready, willing, or even in a position, to spend several more billion for Xerox? Under the proposed deal with Fujfilm, Fujifilm would be spending some $6.1 billion to acquire a 50.1 percent majority interest in the new combined Xerox-Fuji Xerox.

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