Earlier in January, IBM and Fujifilm announced the conclusion of the transaction, which involves the joining Xerox in the joint venture of the two companies, Fuji Xerox created more than half a century ago. Xerox closed 2.9% higher at $30.17 on Friday in the US for a market capitalization of $7.7 billion.
In an agreement with the two investors, which together own about 13% of Xerox (xrx), the US office equipment supplier said CEO Jeff Jacobson will step down along with several other board members. "Despite our perseverance, Fujifilm has not given assurances that intends to do so within a reasonable time", the message reads Xerox.
The original deal sought to merge Xerox with a joint-venture Fujifilm operated entity, providing Fuji with majority control. That prompted Icahn and Deason, who own 15 per cent of Xerox and argued the U.S. firm was being undervalued, to launch a proxy fight. Keith Cozza is expected to be named Chairman of the Board.
Xerox Corp. said it's terminating a proposed $6.1 billion takeover by Fujifilm Holdings Corp. and has entered into a new settlement with its activist investors Carl Icahn and Darwin Deason.
Fujifilm said in a statement that it's reviewing all its options, including legal action. "Fujifilm will urge the Xerox board of directors to reconsider their decision".
Helping Icahn and Deason's case was a court decision in late April that temporarily blocked the planned merger with Fujifilm. The lawsuit also claimed that the company's board breached its fiduciary duties.
Fujifilm had said last week it meant to resume discussions with Xerox on a potential combination on "superior terms", but it hadn't received a new proposal from the USA company.
But Norwalk, Connecticut-based Xerox said the deal was being terminated because of Fujifilm's failure to negotiate on improved terms. Fujifilm has said it's appealing a USA court injunction blocking the takeover.
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 almost half of Fujifilm's revenue.
"We do not believe that Xerox has a legal right to terminate our agreement", Fujifilm said in a statement.
The new Board of Directors plans to meet immediately and, among other things, begin a process to evaluate all strategic alternatives to maximize shareholder value.