Xerox-Fuji Film merger deal faces flak in amended lawsuit

The amended lawsuit has been filed by Darwin Deason, a Xerox shareholder, who along with activist shareholder Carl Icahn have nearly 15% stake in Xerox.

As per a report by the Wall Street Journal, a lawsuit has been filed alleging that Jeff Jacobson, CEO of Xerox Corp, continued to pursue a deal with Fujifilm Holdings Corp despite the board of director’s advice to halt negotiation.

In January 2018, Xerox and Fujifilm struck a $6.1 billion merger deal which will see the U.S. company merge into their existing joint venture, Fuji Xerox; the deal comes as demand for office printers and related equipments are in the decline.

As per a court filing, in November Xerox’s board had advised Jacobson to halt negotiations since it was considering firing him.

The amended lawsuit has been filed by Darwin Deason, a Xerox shareholder who is opposed to the Fuji Film deal since it undervalues Xerox.

However said Xerox’s Chairman Robert Keegan said in a statement, “Xerox CEO Jeff Jacobson was fully authorized to engage in discussions with Fujifilm and Fuji Xerox on the proposed combination”.

He went on to add, the lawsuit “distorts many of the facts regarding the proposed combination with Fuji Xerox.”

Activist shareholder Carl Icahn and Deason, who have a combined 15% stake in Xerox, are fighting the merger deal since they say it “disproportionately” favors Fuji.

They are separately looking to shake up the Xerox board.

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