Regular readers will remember the fun and games earlier this year when Fujifilm proposed a merger-cum-acquisition of Xerox, which ultimately led to a wholesale change of board directors at Xerox.
In the midst of this shenanigans in April a New York court granted a preliminary injunction to halt the deal resulting from a lawsuit filed by Darwin Deason, a Xerox shareholder. However, following an appeal by Fujifilm, the appellate Court of New York State has now dissolved this injunction, ending the lawsuit. Not surprisingly, Fujifilm has said that this decision validates its belief that “the Company acted properly and negotiated with Xerox at arms’ length for the transaction that was unanimously approved by the Boards of both companies.”
By May Xerox had reached an agreement with Deason and his fellow shareholder Carl Icahn, which ultimately led to new management, who promptly walked away from the proposed deal with Fujifilm. However, Fujifilm is still interested in pursuing this deal, stating: “The Company continues to believe that the business combination of Fuji Xerox and Xerox, including its terms and conditions, is the best option to provide exceptional value to shareholders of both companies, and the Court’s decision will allow us to discuss with Xerox the fulfillment of the original agreement.”
Fujifilm still has an outstanding lawsuit, claiming $1 billion in compensation from Xerox for backing out of the deal. In reality both companies are still heavily dependent on each other through the Fuji Xerox joint venture, which neither can really afford to walk away from. However, it’s likely that Fujifilm will have to come up with more money or at least a better argument than appealing to Xerox to put the original deal to all of its shareholders.
This latest ruling also vindicates Jeff Jacobson, the former CEO of Xerox, who Deason had accused of acting improperly in continuing to push for the deal with Fujifilm.