Xerox Corp. has called off a planned $6.1 billion deal with Fujifilm Holdings Corp. after reaching a settlement with activist investors Carl Icahn and Darwin Deason.
Activist investors Carl Icahn and Darwin Deason will hand control of the U.S. photocopier giant to new management after months of infighting and reaching a settlement.
The printer and photocopier maker said late on Sunday that its long-time Japanese partner had failed to deliver audited financials, limiting its ability to consummate the transaction.
The victory for the billionaire investors puts the Japanese company further on the back foot in any new negotiations with Xerox, although it is by no means out of contention as Xerox is now expected to go up for sale in an auction at a higher price.
Xerox said that it had over several weeks repeatedly asked Fujifilm to immediately start talks about improved terms for a proposed transaction.
“Despite our insistence, Fujifilm provided no assurance that it will do so within an acceptable timeframe,” the U.S. firm said in a statement on its decision to drop the deal.
Fujifilm was quick to take a combative stance, saying it disputes Xerox’s right to terminate the deal and would look at all options including legal action seeking damages.
The two companies agreed in January to a complex deal that would have merged Xerox into their Asia joint venture Fuji Xerox and given Fujifilm control. That prompted Icahn and Deason, who owns 15 percent of Xerox and argued the U.S. firm was being undervalued, to launch a proxy fight.
The activist investors have also said they are unhappy with the current structure of the joint venture, and settlement creates uncertainty concerning potential changes to a business that accounts for nearly half of Fujifilm’s revenue.
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