This Week in Imaging: What’s Next for Xerox? Plus, Ricoh, Epson, EFI Financials, More
This week the battle between the Xerox Board of Directors and activist investors Carl Icahn and Darwin Deason reached Shakespearean-drama levels with a stunning settlement offered by the Xerox Board to end Deason’s litigation, and an offer to discuss alternatives to the proposed Xerox-Fuji Xerox merger. The Xerox agreement includes the resignation of seven Xerox board members and its CEO, Jeff Jacobson. The agreement also specifies the appointment of an Ichan consultant, John Vistentin, to serve as the new Xerox CEO, and the appointment of six new board members. The agreement came after months of Xerox defending the proposed merger and sale of Xerox to Fujifilm.
As might perhaps be expected, Icahn was not magnanimous in victory, slamming Fujifilm in a statement: “Fujifilm, our supposed ‘partner’ whose conduct over the last year is more unbelievable than what you see on fictional TV shows like House of Cards or Billions.” As for Deason’s part, while his litigation against Xerox is over, it still stands against Fujifilm, which he’s accused of “aiding and abetting” the proposed deal.
As for what happens next at Xerox is up for debate. Icahn has argued that the proposed deal under which Fujifilm purchases Xerox for $6.1 billion undervalues Xerox, and has said that Xerox could fetch a higher price from either a private-equity firm or a competitor. Court papers have revealed that last year, HP Inc. does appear to have approached Xerox, which has a market value of about $8 billion.
Icahn has also recommended that Xerox “Partner with strategic, under-served PC makers,” which it says include HP Inc. (noting that HP Inc. sources a significant portion of its A4 and A3 laser-print engines from Canon Inc.), Lenovo, Dell, Apple, Asus, Acer, and/or “Others.”
Will Icahn and Deason approach HP? Or will Icahn advise a different route – that of corporate raider, a term first applied to him in the 1980s, when he took over Trans World Airlines and sold TWA’s assets to repay the money he borrowed to purchase the company, winding up with a personal profit of $469 million, and leaving TWA with a debt of $540 million.
A private-equity deal may also be in the works: on May 2nd Reuters reported that buy-out firm Appollo Global is approaching Xerox with possible acquisition in mind. Meanwhile, Fujifilm said it will appeal the court order blocking the deal.
One thing we can pretty much count on is that unless Fujifilm is prepared to pay more (probably much more) for Xerox, the proposed Xerox-Fuji Xerox deal is probably not going to happen.
Last but not least, be sure to check out our story on Panasonic’s Analyst Day held earlier this week. Yes, Panasonic has gotten out of the copier market, but it continues to make impressive document scanners. At the event, Panasonic updated us on its new developments in document scanning hardware and software, and new upcoming solutions.