Xerox Corp. said it's terminating a proposed $6.1 billion takeover by Fujifilm Holdings Corp. and has entered into a new settlement with its activist investors Carl Icahn and Darwin Deason.
That prompted Icahn and Deason, who own 15 percent of Xerox and argued the US firm was being undervalued, to launch a proxy fight.
As previously reported, last year Fujifilm discovered accounting irregularities within two subsidiaries of its joint-venture Fuji Xerox Australia New Zealand operations.
Under the terms of the settlement agreement, Xerox appointed five new members to its Board of Directors: Jonathan Christodoro, Keith Cozza, Nicholas Graziano, Scott Letier and John Visentin.
Xerox said that it had over several weeks repeatedly asked Fujifilm to immediately start talks about improved terms for a proposed transaction. "Despite our insistence, Fujifilm provided no assurance that it will do so within an acceptable timeframe", Xerox's former board said in a statement.
"The transaction can not reasonably be expected to be completed under these circumstances, particularly given the court's injunction of the transaction and the lack of shareholder support for the transaction on current terms, as well as the unresolved accounting issues at Fuji Xerox", the company asserts in a statement.More news: Simon Yates extends Giro d'Italia lead as Chris Froome flops
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Fujifilm is disputing Xerox's "unilateral decision".
Fujifilm said in a statement that it'sreviewing all its options, including legal action. The American company and the two shareholders had already reached a settlement earlier this month before it fell apart days later before it could be implemented. "Icahn and Deason say there are, because they want a higher price, but you don't really know whether that's for real", said Ichiyoshi Asset Management senior executive officer Mitsushige Akino.
"With the limiting Fujifilm agreement terminated, Xerox is now positioned to conduct a true, robust strategic alternatives process". "With that behind us and new shareholder-focused leadership in place, today marks a new beginning for Xerox".
As part of its choice to call off the merger contract, Xerox fired its chief executive Jeff Jacobson in ancient might.
Xerox said the settlement with Icahn and Deason resolved a proxy contest set to play out at Xerox's 2018 annual meeting, originally scheduled for June 13.
Icahn and Deason have said they would consider an all-cash bid of at least $40 per share.