In the ongoing “melodrama” between industry giants Fujifilm and Xerox, Fujifilm Holdings Corporation is suing Xerox Corporation for breach of contract and estimated damages of more than $1 billion after Xerox walked away from a planned merger earlier this year. Though Xerox appeared to reach an agreement with its dissident investors Carl Icahn and Darwin Deason last month to end the deal it had in place with Fujifilm, apparently it’s still fighting with Fujifilm over the merger the pair sought to prevent. Fujifilm’s federal lawsuit, filed in the Southern District of New York, alleges that Xerox unlawfully terminated an agreement to combine with Fuji Xerox, a joint venture between the two companies, due to pressure from Icahn and Deason (who previously claimed that the deal grossly undervalued Xerox). Fujifilm said that by settling with Icahn and Deason, Xerox therefore prevented other shareholders from having input on the deal.
“It’s inconsistent with shareholder democracy to allow Carl Icahn and Darwin Deason, minority shareholders with only 15% of Xerox’s shares, to dictate the fate of Xerox,” Fujifilm said in a recently released statement. In its rebuttal, Xerox said in a statement that it remains “extremely confident” that its actions were valid. “Xerox will vigorously defend its decision and pursue any and all remedies available to Xerox arising from Fujifilm’s mismanagement and misconduct,” the company said. Fuijfilm said it’s seeking an amount that reflects the lost benefits to Fujifilm shareholders, which it estimates to be “well in excess of $1 billion,” and punitive damages for Xerox’s “intentional and egregious conduct.” The original proposed merger was expected to deliver at least $1.7 billion in annual cost savings and revenue expansion opportunities of at least $1 billion.
(Editor’s note: If you’ve been following this tedious legal melodrama between millionaires and billionaires, you’re not alone. That being said, we’ll always do our best to keep you up to date. Stay tuned).