New York: Xerox Corp. said it’s terminating a proposed $6.1 billion takeover by Fujifilm Holdings Corp. and has entered into a new settlement with its activist investors Carl Icahn and Darwin Deason.
The company also confirmed in a statement that chief executive officer (CEO) Jeff Jacobson will step down as part of the settlement, along with several other board members. John Visentin is expected to take over as CEO while Keith Cozza, the CEO of Icahn Enterprises, would take over as Xerox’s chairman.
Xerox said it was terminating its agreement to combine with Fuji Xerox after Fujifilm failed to provide audited financials for the joint venture on time, and other issues. Bloomberg earlier reported on the deal’s termination.
The settlement marks the end of a tumultuous fight between Xerox and Icahn, its largest shareholder, over a proposed $6.1 billion deal that would hand control of the former US office giant to Fujifilm Holdings Corp. The American company and the two shareholders had already reached a settlement earlier this month before it fell apart days later before it could be implemented.
“Over the past several weeks, the Xerox board has repeatedly requested that Fujifilm immediately enter into negotiations on improved terms for a proposed transaction," Xerox’s former board said in a statement. “Despite our insistence, Fujifilm provided no assurance that it will do so within an acceptable timeframe."
A representative for Fujifilm wasn’t immediately available for comment. Amid pressure from Icahn and Deason, the company had said last week it intends to resume discussions with Xerox on a potential combination on “superior terms," but it had not received a new proposal from the American company. Fujifilm has said it’s appealing a US court injunction blocking the takeover.
Xerox said it believes that the transaction cannot reasonably be expected to be completed under the circumstances, particularly given the court injunction and that shareholders didn’t support it on current terms, as well as unresolved accounting issues at Fuji Xerox.
“The board also considered the potential instability and business disruption during a proxy contest. Absent a viable, timely transaction with Fujifilm, the Xerox board believes it is in the best interests of the company and all of its shareholders to terminate the proposed transaction and enter a new settlement agreement with Icahn and Deason," it said.
Icahn said he was happy with the decision.
“We are extremely pleased that Xerox finally terminated the ill-advised scheme to cede control of the company to Fujifilm," he said. “With that behind us and new shareholder-focused leadership in place, today marks a new beginning for Xerox."
Icahn and Deason have opposed the Fujifilm transaction from the start. Deason sued Xerox in February to block the proposal, accusing Jacobson of acting without authorization to strike a deal that preserved his job at shareholders’ expense. He also claimed in the lawsuit that the company’s board breached its fiduciary duties.
Icahn and Deason repeated their calls last week for Xerox to scrap the Fuji transaction, fire Jacobson, hire a new CEO, and have the board resign. The pair said they would be willing to consider any offers for the company of $40 a share or more.