Xerox has stopped its controversial sale to Fujifilm dead in its tracks after reaching a deal with activist investors Carl Icahn and Darwin Deason who together own 15 per cent of Xerox. The pair opposed the $6.1bn (£4.5bn) deal, saying it undervalued the firm.
The proposed deal saw months of internal politicking at Xerox, including a boardroom reshuffle in favour of the activists and the ousting of the company’s boss. Deason even went so far as to filing a lawsuit that claimed CEO Jeff Jacobson ignored the advice of his board and pursued the deal.
Fujifilm has spoken out against the ‘unilateral decision’ to stop the deal, saying: "We do not believe that Xerox has a legal right to terminate our agreement."
It might even get ugly for Xerox going forwards, with Fuji adding "We are reviewing all of our available options, including bringing a legal action seeking damages,
The reasons cited by Xerox were largely put down to "material deviations" between audited results from its Fuji Xerox joint venture, along with previously unaudited statements.
An understandably smug Icahn welcomed the news, saying "we are extremely pleased that Xerox finally terminated the ill-advised scheme to cede control of the company to Fujifilm".
The deal would have combined Xerox with a joint venture the company operates with Fujifilm. Xerox’s shareholders would have received a $2.5 billion special cash dividend, or approximately $9.80 per share, funded from the combined company’s balance sheet and have owned 49.9 per cent of the combined company at closing.
The divide between those opposed to and in favour of the deal was particularly stark. While the opposition claimed the deal undervalued Xerox, proponents of the merger said it would better serve customers.
Writing for PCR, Steve Hoover, senior VP and CTO at Xerox said that the deal would "dissolve our partner barriers" and that customers would "have access to a broader combined product portfolio and feel confident that they are getting the best product available for them".
It has been reported that Xerox could now go up for sale in an auction, with its new board meeting immediately to "begin a process to evaluate all strategic alternatives to maximise shareholder value".