June 19, 2018
The OEM is filing the suit after the American company pulled out of the widely-publicised Fuji Xerox merger.
The lawsuit, filed in the United States District Court for the Southern District of New York, accuses Xerox’s directors of reneging on their agreement to transfer 50.1 percent of ownership of the American OEM to Fujifilm.
The lawsuit also notes that the decision of Xerox to abandon the deal was “undoubtedly due to external pressures”, in the form of its shareholders Carl Icahn and Darwin Deason, who have spent months running a campaign against both the deal, and former Xerox CEO Jeff Jacobson.
“Fujifilm’s board of directors and management negotiated in good faith to yield a transaction that protects a longtime joint venture, ensures access to its shared patents and ongoing research and development efforts, and will earn Fujifilm shareholders a significant return in synergies and other revenues, both immediately and over time,” declares the suit. “While cognizant of the presence of well-known activist investor Carl Icahn and his penchant for seeking the ever-better deal, Fujifilm bargained for the right to seek damages reflecting “the benefit of the bargain lost by a party’s shareholders” if Xerox wilfully breached the Transaction Agreements. Xerox has now done so several times over, thanks in no small part to Icahn and Deason’s machinations.”
Fujifilm is therefore demanding “the benefit of the bargain” formerly agreed with the Xerox board, in the area of $1 billion (€866.1 million), with the final amount to be decided at trial, “reflecting the value Fujifilm’s shareholders would have received had Xerox fulfilled its end of the bargain, along with punitive damages for Xerox’s intentional and egregious conduct.”
The lawsuit illustrates that although Icahn and Deason may have assumed victory, Fujifilm is refusing to roll over, and the long and winding road might have several more twists in it yet.
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