XEROX HIT WITH $1B LAWSUIT
Fallout from broken deal continues
Weeks after billionaire Carl Icahn extricated Xerox from a planned $6.1 billion sale to Fujifilm Holdings, the Japan-based company is suing Xerox in New York federal court for $1 billion for having broken off the deal.
After winning a board proxy contest last month, Icahn and fellow Xerox investor Darwin Deason had forced the exit of Bob Keegan and Jeff Jacobson from their roles of chairman and CEO of Norwalk-based Xerox, respectively, arguing the deal they reached with Fujifilm undervalued Xerox shares compared to how the technology giant could fare on its own.
Deason had sued Xerox in New York state court to block the deal. The Xerox board acceded only after a judge scheduled a September hearing on the case over Xerox’s arguments at the time for an immediate resolution.
Icahn and Deason have also raised the possibility of ending the half-century-old Fuji Xerox joint venture that holds sales rights to the Asia-Pacific region, arguing that a Fuji Xerox accounting scandal allows Xerox to scotch the partnership.
In a statement forwarded by an external publicist firm, Fujifilm argued Xerox did not have “legitimate cause” to terminate the merger agreement unilaterally, and that the companies negotiated “at arm’s length” and in good faith to arrive at the $6.1 billion valuation. Fujifilm is seeking additional punitive damages and payment of a $183 million merger termination fee.
“Fujifilm is confident that the (court) will agree that all Xerox shareholders ought to decide for themselves the operational, financial and strategic merits of the transaction,” Fujifilm said. “It is inconsistent with shareholder democracy to allow Carl Icahn and Darwin Deason, minority shareholders with only 15 (percent) of Xerox’s shares, to dictate the fate of Xerox.”
In a blanket statement issued to press outlets, Xerox said it would pursue “any and all remedies available ... arising from Fuji’s mis- management and misconduct.”
Separately Monday, Xerox announced the hiring of Mary McHugh as chief delivery officer, responsible for global delivery of Xerox products and services from manufacturing to delivery and customer service.
McHugh previously worked for Oracle and earlier in her career for HP and IBM, where Visentin also was a senior manager prior to his appointment to lead the Pitney Bowes spinoff Novitex Enterprise Solutions.