Judge Refuses to Lift Injunction Barring Xerox-Fujifilm Deal

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Bloomberg reports that Fujifilm of Tokyo, Japan, failed to convince a New York State Supreme Court judge to reverse a decision issued in April that blocks Fujifilm’s complex deal to purchase Xerox, and merge Xerox with Fuji Xerox, Fujifijlm and Xerox’s decades-old joint venture.

As we reported previously, in a separate lawsuit filed this week, Fujifilm also filed a breach-of-contract lawsuit against Xerox, demanding $1 billion in damages.

Activist investor Darwin Deason sued Xerox in February in Manhattan state court to block Fujifilm’s acquisition of Xerox for $6.1 billion, accusing  former Xerox CEO Jeff Jacobson of acting without authorization to strike a deal that preserved his job at shareholders’ expense. Manhattan Supreme Court Justice Barry Ostrager then issued an injunction blocking Fujifilm’s takeover of Xerox from moving forward until the lawsuits were settled.

Xerox then scuttled its plans to pursue the deal as part of an agreement with Deason and Carl Icahn, who together hold about 15 percent of Xerox shares. Jacobson and other Xerox board members also resigned, replaced by Icahn-backed board members, with Jacobson being replaced by Icahn-backed John Visentin.

In its appeal seeking to block Ostrager’s injunction, Fujifilm said it would unfairly be the only party subject to the injunction, as Icahn and Deason and Xerox have reached an agreement. According to Bloomberg, Fujifilm argued that if the injunction were only left in place for Fujifilm, Xerox, Deason, and Icahn would be free to “attack” Fujifilm.

Ostrager told lawyers for Xerox and Fujifilm that they could litigate the case “on the merits to determine if the injunction should be lifted, and he would otherwise leave it in place.”

Fujifilm issued the following statement today: “We are confident that the court will agree that all Xerox shareholders ought to decide for themselves the operational, financial and strategic merits of the transaction. We are confident that the court will agree that all Xerox shareholders ought to decide for themselves the operational, financial and strategic merits of the transaction.”

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