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Fujifilm sues Xerox for $1bn+

Wednesday, 20 June 2018
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Fuji Xerox headquarters in Japan.

Fujifilm Holdings has sued Xerox Corp for more than $1 billion over the termination of a proposed merger deal between the two companies.

In a lawsuit filed with the U.S. District Court in Manhattan, Fujifilm accused Xerox of “intentional and egregious conduct” in walking away from the $6.1 billion merger, according to a report by Reuters.

In January, Xerox and Fujifilm agreed to a deal that would merge Xerox into their 56-year-old joint venture Fuji Xerox, which Fujifilm would control with a 50.1 percent stake.

But after legal action by Xerox activist investors Carl Icahn and Darwin Deason, who said the deal undervalued the company, a new board at Xerox terminated the deal. Icahn and Deason, who together own about 15 percent of Xerox, said they would consider a cash bid of $40 per share.

“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,” Fujifilm said in a statement. “Xerox has recently been subject to the whims of activist investors Carl Icahn and Darwin Deason, who, notwithstanding their minority ownership of Xerox shares, have yanked the Xerox Board in more directions than can be counted.”

The lawsuit seeks punitive damages and a $183 million merger termination fee. Fujifilm has also appealed a temporary injunction granted by a New York state judge to block the merger.

In a statement earlier this week, Xerox said it was “extremely confident” that it had a contractual right to back out of the deal.

One Response to “Fujifilm sues Xerox for $1bn+”

  1. June 20, 2018 at 10:44 pm,

    Andy McCourt

    Had to happen. Minority shareholders do not traditionally decide the direction of a company – the Board do. Only a ‘no confidence’ vote by a majority of shareholders can succeed in ousting a Board. Icahn and Deason have far exceeded their rights as minority 15% shareholders. Yes, they are ‘activisits’ and yes the Law in the USA right now seems to be up for subjective interpretation and activism is rampant. The other 85% have been given no voice so far and that is possibly illegal – maybe they will at the AGM on 31st July and if they have any common sense they will vote for the continuation of the Fujifilm offer. The alternative does not bear thinking about. Right now they have a USD$1 billion lawsuit on their hands, with the law on its side. Well done guys, your greed and meddling has caused this.

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