Fujifilm has declared its intention to sue Xerox for damages, saying the latter had "no legal right" to unilaterally pull out of the planned merger deal.
On Sunday evening (13 May), Xerox announced it had reached a settlement with activist investors Carl Icahn and Darwin Deason, which resulted in the cancellation of its deal with Fujifilm, worth $6.1bn (£4.5bn), and the resignation of Xerox chief executive Jeff Jacobson. Five other directors resigned with Jacobson.
Fujifilm declared today (18 May) at an earnings briefing that Xerox had no right to take unilateral action in dropping the deal and the Japanese company will take legal advice on how to proceed.
"We are currently in talks with lawyers on the schedule for filing the lawsuit and plan to go to court as soon as possible,” said Fujifilm chief operating officer Kenji Sukeno.
According to Reuters, Sukeno said Fujifilm would clarify how the planned deal was in the best interests of Xerox shareholders through the litigation. He suggested willingness to listen to proposals from the new Xerox board and that the deal could be revived if terms would “benefit Fujifilm shareholders”.
He said: “We don’t need to be in a rush to close this deal. We are not bound by time.”
PrintWeek has asked Xerox for comment on Fujifilm’s intentions.
Earlier this week, a Fujifilm spokesperson told PrintWeek: “Fujifilm disputes Xerox’s unilateral decision to terminate the transaction. We do not believe that Xerox has a legal right to terminate our agreement and we are reviewing all of our available options, including bringing a legal action seeking damages.”
On Monday (14 May), Xerox said the deal, which would have combined Xerox with Fuji Xerox, was being terminated due to various factors including “the failure by Fujifilm to deliver the audited financials of Fuji Xerox by April 15, 2018 and the material deviations reflected in the audited financials of Fuji Xerox, when delivered, from the unaudited financial statements of Fuji Xerox and its subsidiaries provided to Xerox prior to the date of the Subscription Agreement.”
Keith Cozza, currently chief executive of Icahn Enterprises, is set to be the new chairman of Xerox. The other new board members are Icahn consultant John Visentin, now Xerox chief executive, Jonathan Christodoro, Nicholas Graziano, and Scott Letier. Board members Gregory Brown, Joseph Echevarria, Cheryl Krongard and Sara Martinez Tucker remain in post.
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”.
Xerox’s share price currently stands at $28.47, down from $30.18 at the end of last week. The 52-week high is $37.42, low: $27.11.