The proposed takeover of Xerox by Fuji has been temporarily blocked by a judge in New York City.
According to Reuters, State Supreme Court Justice Barry Ostrager issued a preliminary injunction on Friday after activist investors sued to try and stop the deal.
The judge is quoted as saying that CEO Jeff Jacobson sought to conclude the deal even though he was advised to end negotiations.
Xerox provided this statement to WXXI News:
“Xerox disagrees with the court’s ruling to enjoin the shareholder vote on our proposed combination with Fuji Xerox and to waive the advance notice bylaw. The company strongly believes that its shareholders should be allowed to exercise their right to vote on the transaction and decide for themselves. Xerox will immediately appeal the court’s decision.
The Xerox Board undertook a rigorous process to reach 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 in its negotiations with Fujifilm over a ten-month period."
Xerox’s Board believes that a combination with Fuji Xerox is the best path forward to create value for the Company and all of its shareholders.”
Fuji said it is disappointed by the judge’s ruling and will consider all options including whether to appeal the decision.
The Reuters report quotes Fuji as saying, "We strongly believe that all Xerox shareholders should be able to decide for themselves the operational, financial, and strategic merits of the transaction."
Two of Xerox’s major shareholders, Darwin Deason and Carl Icahn are trying to block the merger saying that that the deal undervalues Xerox.
The ruling on Friday reopens nominations to Xerox's board after Deason filed a lawsuit last month opposing the deal and asking to add his own nominees to the board.
According to Bloomberg, Deason said in a statement released after the ruling, that he is, “...grateful the court acted to protect the shareholders of Xerox,” “Beyond that, we still have a lot of value to create at Xerox and I intend to focus my efforts there.”
Bloomberg reports that Ostrager’s ruling keeps the transaction from proceeding before a final ruling is made in Deason’s lawsuit.