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Xerox will appeal a judge’s injunction to stall the Fuji deal, showing that the company and its reinstated leadership plan to forge ahead.
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Which is a big win for Carl Icahn. Time
File photo shows a Xerox sign outside the company’s facilities in Rochester, NY(Photo: Rochester (N.Y.) Democrat and Chronicle)
ROCHESTER, N.Y. — Xerox Corp. announced Friday it will appeal a judge’s injunction to stall deal with Fujifilm, showing that the company intends to push the merger through despite outcry from shareholders.
Late Thursday, a deal that would have removed Xerox Corp. CEO Jeffrey Jacobson and some of its board members had expired, leaving the company’s leadership team in place — at least for now. That leadership team is now forging ahead.
This comes just days after the company announced that Jacobson and half of its board of directors had agreed to step down. The boardroom shake-up was part of a settlement agreement with activist shareholders Carl Icahn and Darwin Deason, who had grown increasingly unhappy with the company’s direction.
The agreement would have become effective upon “execution of stipulations discontinuing the Deason litigation with respect to the Xerox defendants,” according to a statement released by Xerox.
In the absence of such stipulations, the agreement expired at 8 p.m. May 3.
According to a joint statement released Friday morning by Icahn and Deason, the agreement fell apart when Xerox failed to follow through on the steps they’d agreed to.
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“An expansive release from us and the Company was not enough. Fully insured, robust indemnification rights were not enough,” the statement said. “The Xerox Board declined to take the actions they unanimously approved as in the best interest of Xerox shareholders unless they obtained additional unprecedented protections from the court, which all parties (and the judge!) agree are not required under applicable law.”
Deason and Icahn also said that by failing to take action, the board of directors was “once again intentionally violating their fiduciary duties to Xerox shareholders by pursuing their own brazen self-interest.”
Icahn and Deason have laid siege to Xerox in recent months, pushing for a proxy fight at the company’s annual meeting and filing lawsuits that took aim at the company’s relationship with Fujifilm holdings. They sought to end Xerox’s decades-old joint venture with Fuji and a proposed merger, which would have given the Japanese technology company majority control of Xerox.
In a lawsuit filed last month, Deason alleged that Jacobson continued negotiating with Fujifilm on the deal after the board of directors instructed him to stop, and after they had commenced a search for his replacement. Deason also accused the board of rushing to approve the transaction when there was no reason to, other than to head off a potential proxy battle with Icahn.
“Over the next few months, we intend to see that ‘massively conflicted’ Jeff Jacobson and old guard directors like Bob Keegan, Ann Reese and Chuck Prince, who have already done so much damage to the company, and are continuing to do more damage with these actions, are held fully and personally liable for their misconduct. Similarly, we intend to see that Fujifilm is held fully liable as an aider and abettor of the continuing breaches of fiduciary duties by those directors,” according the Ichan-Deason statement.
In the statement released by Xerox, the company says it recognizes the uncertainty caused by the developments of the past several days among the company’s investors and other stakeholders.
“The Xerox Board and management team remain focused on driving continued improvement in financial and operational performance, and will consider all options to create value for the company and its shareholders,” according to the statement.