Xerox calls off $6.1bn sale to Fujifilm

Xerox calls off $6.1bn sale to Fujifilm

In the latest extraordinary turn of events surrounding the on-off takeover saga, Xerox announced yesterday evening (13 May) that it had reached a further settlement agreement with activist investors Carl Icahn and Darwin Deason.

Following the abandoned Fujifilm deal, Xerox now appears likely to go up for sale in an auction, Reuters noted. "Despite our insistence, Fujifilm provided no assurance that it will do so within an acceptable timeframe". That prompted Icahn and Deason, who own 15 per cent of Xerox and argued the US firm was being undervalued, to launch a proxy fight.

Xerox said in a statement on Saturday that it made a decision to terminate the merger agreement because of Fujifilm's failure to provide audited financials for the joint venture on time.

In an agreement with the two investors, which together own about 13% of Xerox (xrx), the USA office equipment supplier said CEO Jeff Jacobson will step down along with several other board members.

Fujifilm said it would urge the new board of Xerox to reconsider. John Visentin is expected to take over as CEO while Keith Cozza, the CEO of Icahn Enterprises, will become chairman.

Icahn and Deason have said they believe other investors are "waiting in the wings" for Xerox while people familiar with the matter have previously said that buyout firm Apollo Global Management LLC has expressed interest in a bid for Xerox. Both praised Xerox's decision to pull out of the deal. The company is considering all available options, including filing a claim for compensation.

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The decision ends a tumultuous and long-running battle between Icahn, Deason and Xerox, and will see to see the departure of five board members including CEO, Jeff Jacobson. Bloomberg earlier reported on the deal's termination. Fujifilm has said it's appealing a USA court injunction blocking the takeover.

Xerox's former board said it believes the transaction can not be completed under the circumstances, citing a court injunction and "the lack of shareholder support for the transaction on current terms".

"The board also considered the potential instability and business disruption during a proxy contest".

Icahn said the agreement marked "a new beginning" for Xerox, while Deason said the company would now be positioned "to conduct a true, robust strategic alternatives process".

"We do not believe that Xerox has a legal right to terminate our agreement", Fujifilm said in a statement.

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