Xerox has dropped its planned $6.1bn (£4.5bn) sale to Fujifilm after settling with activist investors Carl Icahn and Darwin Deason, who wanted the deal scrapped. However, Xerox may well be sold in an open auction. Fujifilm has suggested it may take legal action after Xerox unilaterally cancelled the agreed deal, which would have used the two companies' long-term joint venture as a vehicle to complete the takeover.
Before cancelling it, Xerox said it had asked Fujifilm for talks about improved terms around the deal. Xerox said of the Fujifilm deal cancellation: “Despite our insistence [for arranging talks], Fujifilm provided no assurance that it will do so within an acceptable timeframe.”
Xerox also said it was cancelling deal because it claimed Fujifilm had failed to provide audited financial information for the Fuji Xerox joint venture by a 15 April deadline, and that there were “material deviations” between audited Fuji Xerox financial statements and unaudited statements previously provided.
Earlier this month, the two activists – who own a total of around 15% of Xerox stock - claimed the scalp of Xerox CEO Jeff Jacobson in an agreed departure, only for Jacobson and the Xerox board to cancel that deal too, after saying it had “expired”.
However, the new settlement with the activists will see Jacobson, the main architect of the deal with Fujifilm, as well as five other directors, step down. Icahn said: “We are extremely pleased that Xerox finally terminated the ill-advised scheme to cede control of the company to Fujifilm.”
The Fuji Xerox joint venture is 75%-owned by Fujifilm and handles contracts that supply global clients with Xerox services in the US and Europe. Icahn and Deason maintained that the takeover “undervalued” Xerox.
