Carl Icahn and Darwin Deason issue open letter opposing Fuji Xerox merger

The activist investors have stated that by itself Xerox still has enormous value for shareholders and that its divestiture to Fujifilm is not justified given the premium offered by the Japanese firm.

Xerox Corp’s $6.1 billion deal to divests its assets to Fujifilm Holdings is facing strong headwinds from Carl Icahn and Darwin Deason, who own a combined 15% of Xerox’s shares, who have urged fellow shareholders to oppose the move.

The activist shareholders have termed the Fuji Xerox joint venture as a “tortured (and) convoluted” enterprise.

“We urge you – our fellow shareholders – do not let Fuji steal this company from us,” said Icahn and Deason in an open letter.

Their letter says Xerox has still great opportunity to create “enormous value for shareholders, and it does not involve selling control to Fuji without a premium”.

In a statement, Xerox said, it had considered several options in detail and had come to the conclusion that a merger with Fuji is the “best path to create value” for the company.

In a separate statement, Fujifilm said the planned deal “represents compelling strategic and financial value for Xerox shareholders. The combined company will create a strong business foundation under a globally unified management strategy and provide new value by leveraging Fujifilm’s technological resources”.

With the news of the open letter reaching the media, shares of Xerox nudged up by 1.1% while Fujifilm’s stock dropped by 2% in early trading on Tuesday.

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