On Tuesday, Xerox announced it had reached a settlement in a lawsuit and proxy contest spearheaded by key shareholders Carl Icahn and Darwin Deason, which spelled the end for CEO Jeff Jacobson, Board Chairman Robert Keegan and five other incumbent board members. John Visentin seemed poised to assume the CEO mantle, and the proposed $6.1 billion union with Fujifilm Holdings appeared to be on the verge of collapse.
But what a difference 48 hours makes.
John Visentin, the would-be successor to Jeff Jacobson as Xerox CEO.
The settlement deal expired at 8 p.m. Thursday when last-minute details issues could not be hammered out between the parties. According to a statement released by Xerox, “the agreement would have become effective upon execution of stipulations discontinuing the Deason litigation with respect to the Xerox defendants.” Absent those stipulations, the agreement expired.
“The Xerox Board and management team remain focused on driving continued improvement in financial and operational performance, and will consider all options to create value for the company and its shareholders,” Xerox said in the statement.
The news comes as a reprieve for Jacobson, Keegan, most of its board and—last but not least—the Xerox-Fuji Xerox union.
Reuters reported that Deason and Icahn blamed Xerox for allowing the settlement to dissolve and vowed to continue the fight. Adding further intrigue, buyout firm Apollo Global Management has approached Xerox regarding a possible acquisition. Funds affiliated with Apollo had previously invested in companies where Visentin had served in executive capacities.
Peace Accord
On Tuesday, Xerox announced it had reached an agreement with Deason and Icahn to resolve the pending proxy contest in connection with the company’s 2018 annual shareholder meeting, in addition to the shareholder litigation. Deason and Icahn, who hold a combined 15 percent of Xerox shares, won a court order last Friday blocking the proposed merger with Fuji Xerox when a New York judge determined that Jacobson had been “hopelessly conflicted” in crafting an agreement that would have kept him at the helm of Xerox, as he knew the board had sought to replace him.
In a statement announcing the deal, Xerox said it had approached Fujifilm Holdings regarding an increase in consideration, to which Fujifilm had not responded. After the court enjoined the Xerox combination with Fuji Xerox, Xerox weighed the risks of prolonged litigation and its associated risks and determined a resolution of the pending litigation and proxy contest was in its best interests. But the resolution had a self-imposed expiration date, and when 8 p.m. Eastern came and went Thursday night, the deal had fallen apart.
Under the proposed deal, Xerox was to appoint six new members to its board of directors: Visentin, Keith Cozza, Nicholas Graziano, Scott Letier, Jay Firestone and Randolph Read. In addition to Jacobson and Keegan, Charles Prince, Ann Reese, William Curt Hunter, Sara Martinez Tucker and Stephen Rusckowski all would have resigned.
For now, all the board members and Jacobson remain intact. Shares of Xerox have fallen more than 12 percent since the Tuesday announcement.
