Fuji Xerox and Xerox merge agreement terminated
Following a tumultuous past few weeks, Xerox terminates transaction agreement with Fujifilm and enters into new contract with Carl Icahn and Darwin Deason; Jeff Jacobson to resign as Xerox CEO.
On 13 May, Xerox announced that it notified Fujifilm that the previously announced transaction agreement to combine Xerox with Fuji Xerox is being terminated.
The termination was in accordance with its terms due to, among other things, the failure by Fujifilm to deliver the audited financials of Fuji Xerox by 15 April 2018 and the material deviations reflected in the audited financials of Fuji Xerox, when delivered, from the unaudited financial statements of Fuji Xerox and its subsidiaries provided to Xerox prior to the date of the Subscription Agreement and taking into account other circumstances limiting the ability of the Company, Fujifilm and Fuji Xerox to consummate a transaction.
Thereafter, Xerox entered into a new settlement agreement with Carl Icahn and Darwin Deason.
The settlement agreement resolves the pending proxy contest in connection with the company’s 2018 Annual Meeting of Shareholders and Deason’s litigation against Xerox and its directors. It does not affect any claims of Deason or other Xerox shareholders against Fujifilm for aiding and abetting.
Under the terms of the settlement agreement, the following has occurred:
Xerox appointed five new members to its Board of Directors: Jonathan Christodoro, Keith Cozza, Nicholas Graziano, Scott Letier and John Visentin.
Gregory Brown, Joseph Echevarria, Cheryl Krongard and Sara Martinez Tucker will continue to serve as members of the Xerox Board of Directors.
Robert J. Keegan, Charles Prince, Ann N. Reese, William Curt Hunter, and Stephen H. Rusckowski each resigned from the Board of Directors of Xerox.
Jeff Jacobson has also resigned as Chief Executive Officer and as a member of the Board of Directors of Xerox. Expecting to replacing him is John Visentin as Vice Chairman and new CEO of Xerox.
As part of the agreement, Xerox and Carl Icahn will withdraw their respective nominations of any other director candidates for election at the 2018 Annual Meeting of Shareholders. Xerox will continue to waive the advance notice bylaw to enable any Xerox shareholder to provide notice of intent to nominate directors for election at the 2018 Annual Meeting of Shareholders until 13 June 2018. The 2018 Annual Meeting of Shareholders will be postponed to a later date.
The former Board of Directors of Xerox provided the following statement:
“Over the past several weeks, the Xerox Board has repeatedly requested that Fujifilm immediately enter into negotiations on improved terms for a proposed transaction. Despite our insistence, Fujifilm provided no assurance that it will do so within an acceptable timeframe. The Xerox Board believes that the transaction cannot reasonably be expected to be completed under these circumstances, particularly given the court’s injunction of the transaction and the lack of shareholder support for the transaction on current terms, as well as the unresolved accounting issues at Fuji Xerox.
The Board also considered the potential instability and business disruption during a proxy contest. Absent a viable, timely transaction with Fujifilm, the Xerox Board believes it is in the best interests of the company and all of its shareholders to terminate the proposed transaction and enter a new settlement agreement with Icahn and Deason. Under the agreement, the Xerox Board will be reconstituted to determine the best path forward to maximise value for Xerox shareholders.”