Fujifilm on Monday filed a federal breach of contract lawsuit to stop Xerox from backing out of a proposed $6.1 billion takeover offer.
The 36-page complaint accuses Norwalk, Conn.-based Xerox of lacking cause to break the agreement to sell majority control of the American icon to Fuji.
“Fujifilm and Xerox negotiated in good faith and at arm’s length for a transaction based on fair valuations,” Fujifilm said in a statement. “Fujifilm continues to believe the business combination of Fuji Xerox and Xerox is the only correct solution to provide shareholders of both companies with exceptional short- and long-term value.”
The agreement was negotiated by Xerox's former CEO, Jeff Jacobson, and announced in January. The terms of the deal immediately drew the ire of two majority shareholders, Carl Icahn and Darwin Deason, who launched a relentless media and legal battle to both remove Jacobson and halt the accord.
On May 13, Icahn appeared to win. Jacobson stepped down, and Icahn’s preferred choice for CEO, John Visentin, replaced him. Xerox announced that the deal with Fujifilm had been scrapped after the Japanese company refused to negotiate for better terms or release financial statements relative to the sale.
Fujifilm immediately threatened to sue, and Monday, made good on their threat.
“It is inconsistent with shareholder democracy to allow Carl Icahn and Darwin Deason, minority shareholders with only 15 percent of Xerox’s shares, to dictate the fate of Xerox," Fujifilm said in the statement.
In its own statement released hours after Fujifilm filed the lawsuit, Xerox rejected the notion that it was in breach of contract when it stepped away from the deal.
“We remain extremely confident that the former Board correctly exercised its clear contractual right to validly terminate the transaction agreements due to, among other things, the continuously expanding unresolved accounting issues at Fuji Xerox,” the statement read. “ Xerox will vigorously defend its decision and pursue any and all remedies available to Xerox arising from Fujifilm’s mismanagement and misconduct.”