Carl Icahn
Xerox Corp shareholders Carl Icahn and Darwin Deason said U.S. company should seek to sell itself to one of its rivals or a private equity firm.
Xerox could combine with a competitor that is actually willing to pay a significant premium, or Japan's Fujifilm Holdings themselves would step up and offer a full buy-out on fair terms, the shareholders wrote in an open letter.
“For 17 years, Xerox withheld (we believe illegally) the agreements governing the Fuji Xerox joint venture – agreements the company now claims permanently prevent (for all intents and purposes) anyone other than Fuji from buying Xerox,” the open letter stated.
“But the truth is that if this ostrich board of directors would simply take their heads out of the sand and do a deeper dive into the advice being given to them by Jeff Jacobson (who just wants a bigger job) and its financial advisors (who just want a huge fee), then they would see that there are viable alternatives to the proposed Fuji scheme.
“Possibly the best alternative would be to consolidate with or sell to one of our competitors (or to a private equity firm who would optimise the business and return it to growth) who we believe would pay a large premium once they truly understood they could get around the Fuji Xerox joint venture agreements and eventually operate unfettered in Asia using the Xerox trademark and Xerox’s many patents.”
The activist shareholders, who own a combined 15 per cent of the U.S. printer and copier maker, have repeatedly urged shareholders to oppose the Fuji-Xerox deal.
Icahn and Deason said last week the agreement dramatically undervalued Xerox, and criticised the deal structure calling it "tortured, convoluted".
"Carl Icahn and Darwin Deason's letter is consistent with their misguided campaign to undermine Xerox's combination with Fuji Xerox," Xerox said in a statement on Tuesday.
The company reiterated that among the range of strategic options, combination with Fuji Xerox is the superior path forward for Xerox.
On 31 January, Fujifilm said it was set to take over Xerox in a US$6.1 billion deal and combine it into their existing joint venture, Fuji Xerox.
Shares of Xerox were up nearly one per cent.
(Reporting by Supantha Mukherjee and Sonam Rai in Bengaluru; Editing by Bernard Orr)
