Legal block on Fujifilm-Xerox deal is overturned
Thursday, October 18, 2018
After a four-month hiatus the Fujifilm-Xerox takeover deal could be resurrected after a New York State judge ruled in Fujifilm’s favour and reversed a previous court injunction blocking the deal.
The court ruling in April was as a result of a lawsuit filed by major Xerox shareholder Darwin Deason, which put a temporary block on Xerox’s sale to Fujifilm amid claims that Xerox’s then-CEO Jeff Jacobson was “hopelessly conflicted” when negotiating the terms of the $6.1bn (£4.5bn) deal originally agreed at the end of January.
A US Court has now overturned that injunction.
In a statement, Fujifilm said: “We are very pleased with the New York State Appellate Court’s decision, which ends the lawsuit against Fujifilm in its entirety and validates our position that Fujifilm acted properly and negotiated with Xerox at arms’ length for the transaction that was unanimously approved by the boards of both companies.
“Fujifilm continues to believe that the business combination of Fuji Xerox and Xerox, including its terms and conditions, is the best option to provide exceptional value to shareholders of both companies, and the Court’s decision will allow us to discuss with Xerox the fulfilment of the original agreement. All Xerox shareholders ought to be able to decide for themselves the operational, financial, and strategic merits of the transaction to combine Fuji Xerox and Xerox.”
It's not clear what will happen next. According to the Nikkei Asian Review, Fujifilm boss Shigetaka Komori will make a decision by the end of the year about whether to pursue the deal.
Following the high-profile campaign by activist investors Carl Icahn and Deason against the terms of the merger, the Xerox board is now materially different to the board that originally agreed the Fujifilm takeover, with five new board members in place and a new CEO, John Visentin.
The Fujifilm proposals have not been put to a vote of Xerox shareholders.
Xerox had not commented at the time of writing.
Fujifilm has also filed a separate $1bn lawsuit for damages over the collapse of the proposed merger.