New York — A state appellate court here has overturned preliminary injunctions requested by activist investors who had blocked the merger of Fuji Xerox and Xerox, possibly opening the door to negotiations between the embattled firms.
John Visentin, Xerox CEO
Reuters reported that the ruling could give Menahga, Japan-based Fujifilm leverage to pressure Xerox back to the bargaining table. In a separate suit, Fujifilm is seeking is seeking more than $1 billion in damages for breach of contract.
Back in May, Xerox nixed the $6.1 merger with Fuji Xerox as part of a settlement with dissident shareholders Carl Icahn and Darwin Deason.
After weeks of lawsuit threats and accusations of back-room deals being cut, Norwalk, CT-based Xerox announced it had abandoned the deal. This led to the ouster of CEO Jeff Jacobsen, who resigned, as did five other board members. John Visentin, Keith Cozza, Jonathan Christodoro, Nicholas Graziano and Scott Letier all were appointed to the board, with Visentin named CEO.
How the overturned preliminary injunction will impact the scenario remains to be seen, though Fujifilm could theoretically increase the offer to garner Xerox shareholder sympathy. The new Xerox regime remains steadfast in exploring other scenarios to add shareholder value and maintain the health and vibrancy of the company moving forward.
In a statement published by Reuters, Fujifilm maintains that the original agreement remains in the best interest of shareholders for the respective companies.
“(The) Court’s decision will allow us to discuss with Xerox the fulfillment of the original agreement. All Xerox shareholders ought to be able to decide for themselves the operational, financial, and strategic merits of the transaction to combine Fuji Xerox and Xerox,” the statement read.
In January, Fujifilm and Xerox announced an agreement to merge Xerox with the joint Asian venture Fuji Xerox. The move would have positioned Fujifilm as the controlling company. That initiated a proxy battle by Deason and Icahn, owners of 15 percent of Xerox, on the grounds that the deal vastly undervalued the 113-year-old firm.
Xerox declined to comment on the matter.
