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Xerox Deal With Fuji Called 'Strange And Irregular', Ceo In Hot Water.
Icahn, Deason Step Up Xerox Battle With New Investor Letter, Pair call the $6.1 billion deal with Fujifilm ‘tortured’, Presentation is latest salvo from prominent shareholders.
By Ed Hammond.
Click on this link or photo below to see the Video.
https://www.bloomberg.com/news/articles/2018-04-17/icahn-deason-step-up-xerox-battle-with-new-letter-to-investors
The acrimonious fight over the future of Xerox Corp. looks set to worsen after two of its largest shareholders, activist investor Carl Icahn and Darwin Deason, released a report alleging widespread corporate governance failures in the way the company negotiated its $6.1 billion sale to Fujifilm Holdings Corp.
In a letter to Xerox shareholders published Tuesday, Icahn and Deason accused Xerox’s board of being duped by Fuji into agreeing to a “tortured and convoluted” deal that deprived the company’s shareholders of fair value. They also expanded on claims made in a lawsuit that Xerox’s chief executive officer, Jeffrey Jacobson, put his own desire to preserve his job ahead of the interests of the company.
“Both the substance of the proposed value-destroying transaction and the conflict-tainted process by which it was hatched are an insult to long-suffering Xerox shareholders and make a mockery of well-established corporate governance norms,” the pair wrote.
The letter — and accompanying presentation — is the latest in a series of attacks by Icahn and Deason on Xerox, and its deal with Fuji. They also renewed calls on shareholders to unseat Xerox board members and block the Fuji deal.
Rushed Deal
In a lawsuit in New York state court, Deason alleges a litany of failures. In a heavily redacted revised complaint filed Sunday, the billionaire investor paints a picture of Xerox’s board, with Jacobson leading the charge, as “rushing” to strike a deal with Fuji.“Xerox believes Mr. Deason’s litigation distorts many of the facts regarding the proposed combination with Fuji Xerox,” a spokesman for the company said. “Xerox strongly believes that Mr. Deason’s lawsuit is meritless and it will vigorously defend itself in legal proceedings.”
The Xerox board followed a comprehensive process in reaching its decision to approve the proposed transaction, including a comprehensive review of the strategic and financial alternatives, as well as potential transaction structures and negotiations with Fujifilm over a 10-month period, the spokesman said.
“Xerox CEO Jeff Jacobson was fully authorized to engage in discussions with Fujifilm and Fuji Xerox on the proposed combination,” he said.
A Fujifilm spokeswoman said Deason’s amended complaint “reflects the biased, arbitrary, and inaccurate view of Mr. Deason’s attorneys.” She said the Xerox agreement was “negotiated at arms-length between independent parties with the advice of third party professionals.”
Combining Xerox and Fuji Xerox is the best option for both companies’ shareholders in the short- and long-term, she said.
Merger Plan
Under the terms of the deal the companies agreed to in January, Xerox, which has a market value of $7.6 billion, will first merge with a joint venture that the company operates with Fujifilm in Asia. Current Xerox shareholders will receive a cash dividend of $9.80 per share. Tokyo-based Fujifilm will ultimately end up owning 50.1 percent of the combined entity, which expands the joint venture to encompass all of Xerox’s operations.In the lawsuit, Deason published text messages purporting to be between Fujifilm’s head of strategy, Takashi Kawamura, and Jacobson. The messages came after Icahn called for Jacobson to be replaced as CEO.
“Tak, you will see on the internet, that Icahn has publicly called for Xerox to hire a new CEO. This is what we expected. We will finish our mission and win!” Jacobson wrote, according to the complaint. Kawamura responded: “We are supporting you Jeff!”
In another exchange, Kawamura encouraged Jacobson to “fight our mutual enemy”, a reference, the lawsuit alleges, to Icahn. “We are aligned my friend,” Jacobson replied.
https://www.bloomberg.com/news/articles/2018-04-17/icahn-deason-step-up-xerox-battle-with-new-letter-to-investors
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