In their latest open letter to Xerox shareholders, activist investors Carl Icahn and Darwin Deason cited "viable alternatives" to the proposed $6.1bn (£4.3bn) Fujifilm takeover deal that is currently on the table.
They said the options included a sale to a competitor, a private equity business, or indeed securing a more favourable deal from Fujifilm. They exhorted the Xerox board to "wake up" and continued to call for the board to be replaced, describing the current proposals as a "terrible deal" for Xerox shareholders.
The ongoing war of words between Icahn, Deason and Xerox has resulted in Xerox taking the unusual step of making its own public responses to their claims. It issued a point-by-point rebuttal to their first open letter earlier this month, which Xerox described as "misleading and inaccurate".
In their latest missive, Icahn and Deason have now accused Xerox of making mathematical errors in its report vaunting the value of the deal. They laid out a number of alternative paths. "Possibly the best alternative would be to consolidate with or sell to one of our competitors (or to a private equity firm who would optimise the business and return it to growth) who we believe would pay a large premium once they truly understood they could get around the Fuji Xerox joint venture agreements and eventually operate unfettered in Asia using the Xerox trademark and Xerox’s many patents," they stated.
They also raised concerns about what they described as Fujifilm's "competing" products in high-end inkjet, which are not part of the deal. "There are myriad ways Fuji could oppress us as minority shareholders," the duo warned.
The letter highlighted the pair's 40-year track record in successfully pushing for better deals for shareholders at their various investments.
In response, Xerox issued its own statement and described Icahn and Deason's attempts to undermine the deal as "misguided" and reiterated the merits of the mega-merger.
"The Xerox board and management team evaluated a range of strategic options for the company and determined that the combination with Fuji Xerox is clearly the superior path forward for Xerox," Xerox said.
"Combining with Fuji Xerox will create a global industry leader that leverages the respective strengths of Xerox and Fuji Xerox, maximises the new company’s ability to innovate and compete in today’s market, and unlocks trapped value by eliminating duplicative efforts between the existing joint venture partners.
"The result is a significant opportunity for shareholders to realise long-term, sustainable value as holders of a stronger company, in addition to receiving the near-term substantial dividend payment at closing. The Xerox board and management team remain focused on delivering value for shareholders through this transaction and the ongoing improvement of our business."
It concluded: "We will continue to engage directly with our shareholders on the merits of the transaction."
Deason has also filed a separate lawsuit in an attempt to block the deal. Xerox has refuted his claims, and responded: "It is unfortunate that Mr Deason is seeking to interfere with Xerox shareholders’ right to decide and is relying on meritless legal claims."
The timeline for Xerox shareholders to accept or reject the deal is yet to be announced.
Xerox's share price rose earlier this week after the publication of the latest letter from Icahn and Deason, but subsequently slipped back and was at $30.49 at the time of writing (52-week high: $37.42, low: $26.64).