Fujifilm is considering legal action that would force Xerox to pay damages for backing out of acquisition talks but it said it will not raise the value of its offer for the company.
“The proposed transaction, including its economic terms, was negotiated at arm's length based on fair valuations and we continue to believe it is the best option designed to allow the stockholders of both companies to share the enhanced future value of the combined company with Fujifilm," the company said in a statement. "Fujifilm will urge the Xerox board of directors to reconsider their decision.”
As of Sunday the Xerox board has been restaffed with five new members loyal to activist investors Carl Icahan and Darwin Deason, who had led a four-month PR campaign and court battle to abandon the Fuji talks. Also gone is Xerox CEO Jeff Jacobson.
"Fujifilm disputes Xerox’s unilateral decision to terminate the transaction," the company said in its statement. "We do not believe that Xerox has a legal right to terminate our agreement and we are reviewing all of our available options, including bringing a legal action seeking damages."
Icahn and Deason have previously said they would entertain buyout offers of $40 per share for Xerox, but have repeatedly said the offer from Fuji undervalues the company and forces investors to surrender their control. Under the Jan. 31 agreement with Fujifilm, Xerox would cede a 50.1 percent ownership stake while Xerox shareholders would receive a $2.5 billion special cash dividend and 49.9 percent of the combined company. Fuji would have owned 50.1 percent.
Icahn and Deason -- who own a combined 15 percent stake in Xerox -- rebelled at those terms. Fuji, however, said the deal should be decided by all of the shareholders, not just the largest two.
"We also regret to learn that the new Xerox board is attempting to deprive its shareholders of the opportunity to vote on a transaction designed to create substantial value to be gained from a combination of Xerox and Fuji Xerox and decide for themselves the future of their company," Fuji stated. "We note that this action was taken by a board, the control of which was taken from the rest of its shareholders by a minority holding just 15 percent of outstanding shares pursuant to a settlement agreement that was entered into in violation of our agreement.”