USA court puts Fujifilm, Xerox merger on hold

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"After careful consideration of shareholders' feedback on the proposed combination with Fuji Xerox, Xerox approached Fujifilm regarding a potential increase in consideration to be received by Xerox shareholders".

Xerox Corp.'s Chief Executive Officer Jeffrey Jacobson and six board members are resigning in a win for activist shareholders including Carl Icahn who objected to the company's planned takeover by Fujifilm Holdings Corp.

Fujifilm said it has "serious concerns" about the announced settlement and plans to appeal the court ruling that temporarily blocked the takeover deal, according to a statement Wednesday.

"This agreement mark a watershed moment for corporate governance generally and for Xerox specifically", said Icahn in the statement.

The agreement between Xerox, Mr. Icahn and Mr. Deason will be filed with the U.S. Securities and Exchange Commission. A NY judge last week agreed that CEO Jeff Jacobson had been "hopelessly conflicted" in negotiating a deal that would put him in charge, since he knew the board was looking to replace him.

Judge Barry Ostrager of New York's Supreme Court in Manhattan had ruled the deal prioritized the CEO's interests over that of major shareholders.

Fujifilm shares plunged 5.45 percent to 4,123 yen in Tokyo on Wednesday.

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According to the Xerox statement CEO Jeff Jacobson is expected to be replaced by Keith Cozza as board chairman and John Visentin as CEO - candidates supported by the two shareholders.

Jacobson was a particular target of Icahn's ire, since Icahn and Deason had accused him of rushing into the Fujifilm deal and acting against board instructions (something the board denied in April). With new leadership in place, we believe Xerox will be much better positioned to take advantage of multiple potential value-enhancing opportunities, including restructuring its relationship with Fujifilm, our supposed "partner" whose conduct over the previous year is more unbelievable than what you see on fictional TV shows like House of Cards or Billions.

"With new leadership in place, we believe Xerox will be much better positioned to take advantage of multiple potential value-enhancing opportunities, including restructuring its relationship with Fujifilm, our supposed "partner" whose conduct over the previous year is more unbelievable than what you see on fictional TV shows like House of Cards or Billions".

The billionaire also claimed Xerox made a secret deal in 2001 allowing Fujifilm to exit the Fuji Xerox joint venture if Xerox were taken over by any investor other than the Japanese firm. Tokyo-based Fujifilm would ultimately end up owning 50.1% of the combined entity, which would expand the joint venture to encompass all of Xerox's operations. And John Visentin, an IT industry veteran who worked as a consultant to Icahn Enterprises during the battle over Xerox, is expected to be the new CEO.

"It's a setback for Fujifilm", he said.

Last week, a NY judge's ruling put a temporary block on the agreement.

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