NEW YORK/TOKYO (Reuters) – Xerox Corp (XRX.N) has scrapped a planned $6.1 billion deal with Fujifilm Holdings Corp (4901.T) in a settlement with activist buyers Carl Icahn and Darwin Deason that additionally arms management of the U.S. photocopier large to new administration.
The victory for the billionaire buyers places the Japanese firm additional on the backfoot in any new negotiations with Xerox, though it’s certainly not out of competition as Xerox is now anticipated to go up for sale in an public sale at a better worth.
Fujifilm was fast to take a combative stance, saying in an announcement it disputes Xerox’s unilateral resolution to terminate the transaction and would take a look at all choices together with authorized motion searching for damages.
The two firms agreed in January to a posh deal that may merge Xerox into their Asia three way partnership Fuji Xerox. The deal prompted Icahn and Deason, who personal 15 p.c of Xerox, to launch a proxy battle.
The activist buyers have additionally mentioned they’re sad with the present construction of the three way partnership, and settlement creates uncertainty regarding potential modifications to a enterprise that accounts for almost half of Fujifilm’s income.
The settlement will see Chief Executive Officer Jeff Jacobson – the primary architect of the deal with Fujifilm – in addition to 5 different administrators step down. John Visentin is predicted to take the helm.
It is Xerox’s second settlement with the activist buyers in simply two weeks. The first settlement settlement was allowed to run out as Xerox got here to imagine it had flexibility to renegotiate a deal with Fujifilm and additionally took into consideration a inventory dive that adopted the settlement.
“We are extremely pleased that Xerox finally terminated the ill-advised scheme to cede control of the company to Fujifilm,” Icahn mentioned in an announcement.
Xerox mentioned its new board would meet instantly and “begin a process to evaluate all strategic alternatives to maximize shareholder value.”
Buyout agency Apollo Global Management LLC (APO.N) have thought-about a bid for Xerox, sources have mentioned.
Visentin had beforehand been employed by Icahn to help in combating Xerox. He had additionally been a candidate into consideration by the outdated board to interchange Jacobson as lately as final 12 months, in response to court docket paperwork.
Xerox, which earlier sought higher phrases from Fujifilm, mentioned it was ending the deal with the Japanese firm partly as a result of Fujifilm had failed to offer audited monetary data for Fuji Xerox by an April 15 deadline.
Xerox additionally mentioned there have been “material deviations” between audited Fuji Xerox monetary statements and unaudited statements offered beforehand.
As a part of the settlement, Xerox and Icahn agreed to withdraw their board candidates from an upcoming shareholder assembly, and mentioned the assembly could be postponed.
Reporting by Alwyn Scott and Makiko Yamazaki; Additional reporting by Greg Roumeliotis in New York, Ritsuko Ando in Tokyo and Imail Shakil in Bangalore; Editing by Peter Cooney and Edwina Gibbs