As a result of a court ruling in the US last month Xerox’s merger with Fujifilm has been temporarily blocked. Two of Xerox’s biggest shareholders, Carl Icahn and Darwin Deason, strongly opposed the merger, arguing that the impending $6.1 billion deal would seriously undervalue the photocopier and printer manufacturer. Their lawsuit requested an injunction to the deal and that nominations to Xerox’s board be reopened.
The Judge, Barry Ostrager, ruled that Xerox Chief Executive, Jeff Jacobson had tried to go ahead with the merger with Fujifilm despite recommendations from within his own company to abandon it. Explaining his ruling, Ostrager stated: “The facts abduced at the evidentiary hearing clearly show that Jacobson, having been told on Nov. 10 that the Board was actively seeking a new CEO to replace him, was hopelessly conflicted during his negotiation of a strategic acquisition transaction that would result in a combined entity of which he would be CEO.”
Unsurprisingly Fujifilm has stated that it is disappointed with the ruling and Xerox has said that it will appeal the court decision as “the company strongly believes that its shareholders should be allowed to exercise their right to vote on the transaction and decide for themselves.” Icahn and Deason are understandably much happier with the outcome. The shareholders, who between them own 15% of the company, stated after the verdict that they were “grateful the court acted to protect the shareholders of Xerox.”
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