A lawsuit filed by one of the OEM’s shareholders alleges Jeff Jacobson, CEO of Xerox Corp., continued to seek a deal with Fujifilm despite being advised by Xerox’s board of directors to cease negotiations, according to a story in the Wall Street Journal.
Jeff Jacobson, Xerox CEO
According to an amended suit filed by Xerox shareholder Darwin Deason, who opposes the deal, the board advised Jacobson to cease negotiations last November because it was considering terminating Jacobson. Deason claims the $6.1 billion deal reached in January—which combines Xerox with its existing joint venture, Fuji Xerox—undervalues the printing technology company.
In a statement released last Sunday, Xerox Chairman Robert Keegan said Jacobson acted with full confidence of the board.
“Xerox CEO Jeff Jacobson was fully authorized to engage in discussions with Fujifilm and Fuji Xerox on the proposed combination,” Keegan said. He added that Deason’s suit “distorts many of the facts” of the proposed combination with Fuji Xerox.
A faction among the Xerox shareholders that includes Deason and billionaire investor Carl Icahn are vehemently opposed to the deal, believing it significantly favors Fuji. Both shareholders are seeking to place new members on the Xerox board.
Despite missing the nomination deadline, Deason is trying to nominate directors. According to the Wall Street Journal, his suit contends the sitting board reached a number of significant decisions and made disclosures to stockholders following the deadline for nominations.
The suit includes purported text messages between Jacobson and Takashi Kawamura, Fujifilm’s head of strategy. The day after Jacobson was told he might be terminated, Kawamura warned him that postponing his scheduled trip to meet with Fujifilm could have negative consequences for completing the deal. Further, Kawamura texted that “we should be the one team to fight against our mutual enemy,” which the suit contends is a reference to Icahn, the Journal reported.
Messages in court documents also contend that Jacobson prodded Fujifilm executives to let Keegan know that they wouldn’t do the deal without Jacobson remaining CEO. Keegan was aware Jacobson continued to negotiate with Fujifilm.
Both Keegan and Fujifilm claim the suit distorts the facts, and Fujifilm believes the complaint reflects a “biased, arbitrary and inaccurate view” of Deason’s attorneys, the newspaper reported.
Deason, Xerox’s third-biggest shareholder, alleges Jacobson placed his job security over the interest of Xerox shareholders. The vote on a new Xerox board is likely to occur prior to the vote on the Fujifilm deal.
