Story on lawsuit over Fuji-Xerox deal looks at potential CEO change last year

Apr 15, 2018

A new report says that Xerox had been looking at undertaking a search for a potential new CEO last fall, while discussions were going on about a possible deal with Fuji.

The story is in the Wall Street Journal, which talks about a lawsuit brought recently by dissident shareholder Darwin Deason. He is Xerox’s 3rd largest stockholder, and he and activist shareholder Carl Icahn, have both been pushing for major changes at the company and have expressed opposition to the deal announced in January that would see Fuji gain majority control of Xerox.

Some of this information came out in Xerox’s proxy statement which was released last week.

The proxy says that the Xerox board had formed a committee to look for possible CEO candidates, but later decided to stick with CEO Jeff Jacobson, noting that the company’s performance improved.

The Journal says that the lawsuit filed by Darwin Deason alleges that Jacobson negotiated to sell Xerox and keep his own job while pushing Fuji to help him avoid being ousted under pressure by Carl Icahn.

Xerox provided this statement from Board Chairman Robert Keegan:

"Xerox believes Mr. Deason’s litigation distorts many of the facts regarding the proposed combination with Fuji Xerox. Xerox strongly believes that Mr. Deason’s lawsuit is meritless and it will vigorously defend itself in legal proceedings.

Xerox’s Board of Directors followed a comprehensive process in reaching its decision to approve the proposed transaction, including a comprehensive review of the company’s strategic and financial alternatives, as well as potential transaction structures and negotiations with Fujifilm over a ten-month period.

Xerox CEO Jeff Jacobson was fully authorized to engage in discussions with Fujifilm and Fuji Xerox on the proposed combination."

The Fuji-Xerox deal must still be approved by shareholders.