April 19, 2018
The long-running saga surrounding the Fuji-Xerox merger continues, with a new presentation aiming to halt the deal.
Two of Xerox’s biggest shareholders, Carl Icahn and Darwin Deason – who between them own 15 percent of the OEM – have released a presentation encouraging fellow shareholders to vote to replace certain company directors, in the duo’s latest attempt to derail the Fuji-Xerox scheme.
The presentation, published on Icahn’s website, is accompanied by a co-authored letter attacking in no uncertain terms the “value-destroying transaction and the conflict-tainted process by which it was hatched”, calling them “an insult to long-suffering Xerox shareholders”.
The pair suggest that Fujifilm ‘put one over’ on Xerox’s directors, but declares that “the market cannot be so easily tricked”, and cites the closing price of Xerox stocks and shares as evidence for their case.
Continuing their rejection of the deal, Icahn and Deason’s letter also quotes Professor John Coffee, of Columbia Law School, who called the terms of the merger “a strange and irregular transaction that is simply not comparable to any other transaction I have seen in over 45 years.”
Alleging that Xerox is making a “shameful attempt” to conceal “sordid facts” relating to the transaction from its shareholders, the couple declare that it is “undeniable” the merger has undervalued Xerox in Fuji’s favour. As a result, the presentation calls on Icahn and Deason’s fellow shareholders “to vote out the worst of Xerox’s directors” and to oppose the scheme.
The presentation comes days after Icahn contacted fellow shareholders to announce the employment by the twosome of operating executive John Visentin as a consultant, with the objective of exploring strategic alternatives to the deal that the OEM could take.
In what could be seen as a barbed comment, Icahn welcomed Visentin on board by praising his “superb track record, specifically when it comes to revamping complex operations with prior managerial shortcomings.” Visentin has previously headed units at Hewlett-Packard and IBM, as well as various companies in the Apollo Global Management portfolio.
Icahn declared that Visentin possesses “the ideal skill set to help us show shareholders why the proposed Fuji scheme makes no sense, and how there is tremendous value potential in a stand-alone Xerox with new management.”
Xerox’s Board of Directors has not yet responded. The contention springs from claims that the deal with Fujifilm, announced in January, undervalues the OEM for its shareholders; since initially resisting the merger, Icahn and Deason have published a series of increasingly polemical missives, attacking CEO Jeff Jacobson and attempting to overhaul the Board in their interests. Earlier this month, Deason brought a lawsuit against Jacobson, claiming he had pursued the deal against the wishes of the OEM’s Board of Directors.
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