Xerox ends merger with Fujifilm in victory for shareholders
SAN FRANCISCO: US photocopier and printer maker Xerox announced it was terminating a merger with Fujifilm and appointing a new chief executive after entering into a settlement with activist shareholders who had contested the takeover.
In a statement on its website, Xerox cited ‘material deviations’ in the audited financials of an existing joint venture known as Fuji Xerox that is controlled by Fujifilm.
The move follows a lawsuit by powerful shareholders Carl Icahn and Darwin Deason, who together owned more than 15 per cent of the group and had vigorously opposed the merger announced in January.
Xerox added that Jeff Jacobson had resigned from his role as the company’s CEO, along with five board members who were replaced by five new members.
In Tokyo, Fujifilm disputed Xerox’s ‘unilateral decision.’
“We do not believe that Xerox has a legal right to terminate our agreement and we are reviewing all of our available options, including bringing a legal action seeking damages,” the Japanese firm said in a statement.
The company called on the Xerox board of directors to “reconsider their decision.”
The new board will be chaired by Keith Cozza, who is the current CEO of Icahn Enterprises, while its new CEO is set to be John Visentin.
Xerox said the board would immediately convene to “evaluate all strategic alternatives to maximize shareholder value.”
“Over the past several weeks, the Xerox Board has repeatedly requested that Fujifilm immediately enter into negotiations on improved terms for a proposed transaction,” the firm said.
“Despite our insistence, Fujifilm provided no assurance that it will do so within an acceptable timeframe.
“The Xerox Board believes that the transaction cannot reasonably be expected to be completed under these circumstances, particularly given the court’s injunction of the transaction and the lack of shareholder support for the transaction on current terms, as well as the unresolved accounting issues at Fuji Xerox.” — AFP