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Xerox dismisses Fujifilm court victory in $6bn takeover battle

“We don’t believe it means very much,” says Xerox CEO John Visentin about a court decision last week that Fujifilm claims will allow it to continue negotiations over its proposed $6.1 billion takeover of the US giant.

 

NY Stock exchange
 New York Stock Exchange

The New York State Appellate Court has dissolved a preliminary injunction issued by the New York State Supreme Court in April that stopped the deal that would merge Xerox into 56-year-old joint venture Fuji Xerox - which Fujifilm would control with a 50.1 percent stake.

Fujifilm welcomed last week’s decision, saying it would “allow us to discuss with Xerox the fulfilment of the original agreement.”

But in an investor’s call this week to discuss Xerox’s third-quarter financial results, Xerox CEO John Visentin told shareholders he's unconcerned about the court decision.

“As for the appeals court…we don’t believe it means very much for Xerox because Xerox terminated that transaction for reasons unrelated to the injunctions,” he says.

Xerox’s revenue fell 5.8% year-on-year to $2.35 billion in the third quarter ended Sept. 30.

The company laid off 900 employees around the world in the third quarter as part of cost cutting measures pushed by billionaire activist investors Carl Icahn and Darwin Deason, who opposed the Fujifilm merger agreement.

Xerox Fujifilm
 (l-r) John Visentin, CEO & vice-chairman Xerox; Kenji Sukeno, president & COO, Fujifilm.

 “We were disappointed in the revenue in Q3,” says Visentin, an Icahn ally. “We have an action plan to improve revenues that includes, among other things, simplifying the organizational structure, improving alignment of compensation and evaluating contracts that are not profitable.”

 Visentin says Xerox and Fujifilm are continuing to talk about the future of their joint venture, Fuji Xerox. “We’ve had continued communications with Fuji and with them as joint venture partner. They were here recently for discussions about how…they can provide and earn our business.”

Meanwhile, Fujifilm has vowed to pursue the original takeover deal. “The company…believes that all Xerox shareholders ought to be able to decide for themselves the operational, financial, and strategic merits of the transaction to combine Fuji Xerox and Xerox,” says Fujifilm president Kenji Sukeno.

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