Xerox shares ended the US Friday trading session in the green, after the print and document provisions firm has ended an agreement to merge with Japan’s Fujifilm. Xerox has also come to an agreement with activist investors and a new CEO has been appointed.
Xerox shares closed 2.83% higher at $30.17, in the US Friday. However, the stock is trading lower in out-of-hours activity.
Xerox agreement with activist investors
During a turbulent time for the US print and document management business, Xerox has announced it is no longer seeking to fully merge with Japan’s Fuji Xerox. It has also found common ground with Carl Icahn and Darwin Deason, who together own 15% of the business.
“Xerox today announced that, at 5:00 p.m. ET on May 13, 2018, it notified Fujifilm that the previously announced transaction agreement to combine Xerox with Fuji Xerox is being terminated in accordance with its terms,” Xerox said in a statement.
“Thereafter, Xerox entered into a new settlement agreement with Carl Icahn and Darwin Deason,” it added.
The agreement relates to the Xerox leadership team:
- Jonathan Christodoro, Keith Cozza, Nicholas Graziano, Scott Letier and John Visentin, are the five new appointed board members.
- Robert J. Keegan, Charles Prince, Ann N. Reese, William Curt Hunter, and Stephen H. Rusckowski have all resigned from the Board of Directors of Xerox.
- Gregory Brown, Joseph Echevarria, Cheryl Krongard and Sara Martinez Tucker will remain on the Xerox board.
- Jeff Jacobson resigned from his role as CEO and Xerox board member.
- John Visentin is appointed the new CEO and vice-chairman of the board.
“With the limiting Fujifilm agreement terminated, Xerox is now positioned to conduct a true, robust strategic alternatives process,” shareholder Deason said.
Fujifilm unhappy with broken agreement
While a new order at Xerox could lead to the business seeking a higher purchase offer, Fujifilm said it will investigate the move and potentially seek damages.
“We do not believe that Xerox has a legal right to terminate our agreement,” Fujifilm said in a statement. “We are reviewing all of our available options, including bringing a legal action seeking damages,” Fujifilm added.
However, Xerox said it had repeatedly requested new negotiations be opened between the two businesses on the deal. “Despite our insistence, Fujifilm provided no assurance that it will do so within an acceptable timeframe,” the former Xerox board said.