Xerox CEO Jeff Jacobson and six other board members have agreed to resign in a move that throws the previously reported Fujifilm takeover deal into doubt. The move, according to industry experts, could even spell the end of the long-standing Fuji-Xerox joint venture. Jacobson’s departure after 16 months signals a victory for activist investors Darwin Deason and Carl Icahn, who opposed the deal from the start, while Xerox’s future relationship with Fujifilm could be problematic, experts warn. Jacobson, together with chairman Robert Keegan, and existing Xerox board members Charles Prince, Ann Reese, William Hunter, Sara Tucker, and Stephen Rusckowski will all resign.
“With new leadership in place, we believe Xerox will be much better positioned to take advantage of multiple potential value-enhancing opportunities, including restructuring its relationship with Fujifilm, our supposed ‘partner’, whose conduct over the last year is more unbelievable than what you see on fictional shows like House of Cards or Billions,” Icahn insisted. “Thanks to our efforts and the courage and conviction of Darwin Deason, this is once again an exciting time to be a Xerox stakeholder,” Icahn added.
Xerox’s new board is scheduled to meet immediately and begin a process to evaluate “all strategic alternatives to maximize shareholder value, including terminating or restructuring Xerox’s relationship with Fujifilm and proposed transaction with Fujifilm.” The agreement follows a court order that put a temporary block on the sale of Xerox to Fujifilm. If the order goes through, Keith Cozza, CEO of Icahn Enterprises, will become Xerox Chairman. Former IBM and HP executive John Visentin, who had been mentioned as a replacement for Jacobson last year and has been working for Icahn since March as a consultant, will become Vice Chairman and CEO of Xerox. The four other new board members will be Nicholas Graziano, Scott Letier, Jay Firestone and Randolph Read. Xerox board members Gregory Brown, Joseph Echevarria and Cheryl Krongard will continue in their current positions.
Fujifilm challenges move. The agreement, which would also settle ongoing litigation launched against Xerox by Deason and Icahn, was immediately challenged by Fujifilm. In response, Fujifilm added: “We have serious concerns about the announced settlement and we intend to file our objections with the court shortly. We believe the combination of Xerox and Fuji-Xerox is the best option to provide exceptional value to shareholders of both companies. We also believe that the Xerox new board of directors has an obligation to comply with the agreements that were unanimously approved on January 30, 2018 and signed by both companies on January 31, 2018. In addition, Fujifilm has decided it will appeal the court ruling of April 27, 2018, as we believe the record shows our good faith and arms-length negotiations for the benefit of all shareholders. We strongly believe that all Xerox shareholders should be able to decide for themselves the operational, financial and strategic merits of the transaction.”