Fujifilm Sues Xerox Over Scrapped Sale and Merger
Print Week reports that, as Fujifilm recently threatened, it’s taken Xerox – which last month scrapped a complicated sale of Xerox to Fujiflm – to court.
Fujilm filed its lawsuit at the New York State Supreme Court, describing the settlement between investors Carl Icahn and Darwin Deason, which entailed the resignation of Xerox board members and the resignation of CEO Jeff Jacobson, as a “self-serving, self-interested settlement.”
Under the scrapped, complicated transaction that Xerox announced in January 2018, Fujifilm would have purchased Xerox in a leveraged, non-cash transaction, and Xerox would have been combined with Fuji Xerox, Xerox’s decades-old joint venture with Fujifilm. Xerox CEO Jacobson would have been CEO of the new combined company, and Fujifilm would have had a 50.1 percent controlling interest in the new company.
Fujifilm’s filing stated: “In violation of a valid contract that they unanimously authorised, the Xerox directors decided to secure these self-interested releases by means of a settlement with Deason that included the purported termination of a transaction that those same directors had repeatedly supported both publicly and under oath only weeks earlier.”
Fujifilm said it would also file legal documents on June 14th “that it will use to vindicate its rights in light of Xerox’s wrongful termination of the Shareholders Subscription Agreement.”
The firm argued that “radically changed circumstances since” a judge’s ruling in April that blocked the $6.1 billion sale of Xerox to Fujiflm “provide a separate basis to terminate the injunction as to all parties, not just the Xerox Defendants.”
Fujiflm has also said that it may also seek a $183 million termination fee.
In a letter to Xerox employees, new Xerox CEO John Vistentin stated that a number of options are open to Xerox, including sale to a private-equity firm, public auction, or for Xerox to remain as a standalone entity.
Although HP Inc. last year made an inquiry into purchasing Xerox, certain provisions within the Fuji Xerox contract would mean the loss of Xerox IP and marketing rights in Asia-Pacific if 30-percent or more of Xerox was sold to a competitor. HP is also said to have become hesitant about a purchase.
Icahn and Deason have argued that the proposed, now scrapped sale of Xerox to Fujiflm for $6.1 billion dramatically, with Xerox shareholders receiving about $32 per share, undervalues Xerox, and have said they are open to cash offers of $40 or more per share. Xerox’s share price is currently about $27 per share.
- May 2018: Xerox Calls Off Deal with Fujfilm, Will Install New Leadership
- May 2018: Fujifilm to Sue Xerox over Scrapped Xerox-Fuji Xerox Merger Deal
- May 2018: What’s Next for Xerox? Private Equity Sale, Competitor Sale, or Icahn Plan?
- May 2018: Xerox Shareholders to Take Aim at Fuji Xerox Contract Provisions for Xerox Sale