XEROX FUJIFILM DEAL DEAD. Xerox Drops Merger – By Todd Horwitz, Bubba Trading.

 

Xerox Corp. said it will back out of its merger deal with Fujifilm Holdings Corp. as it reached a new settlement with two of its biggest shareholders, the latest twist in a month-long tug of war over the future of the iconic American company.

The printer and copier company said it reached a settlement to replace its chief executive and overhaul its board after it ended a plan to combine with its joint venture with Fujifilm. This is Xerox’s second settlement with activist shareholders Carl Icahn and Darwin Deason ; the company had earlier struck a deal with the two billionaires to oust Chief Executive Jeff Jacobson and flip the board, but that agreement abruptly expired earlier this month before receiving court approval.

The new board will immediately “discuss strategic alternatives” to the company’s proposed merger, the company said in a release. They will “begin a process to evaluate all strategic alternatives to maximize shareholder value, including terminating or restructuring Xerox’s relationship with Fujifilm and the proposed transaction with Fujifilm.”

The agreement settles the pending litigation against Xerox but has no bearing on the pending claims against Fujifilm. The proposed merger would give Fujifilm control over the majority of Xerox. Deason and Icahn control 15% of Xerox. Opponents of the merger with Fujifilm received a victory on Friday with a court ruling temporarily blocking the merger.
In the complaint, filed in state Supreme Court in Manhattan in February, Deason alleged that the Xerox-Fuji transaction is “extremely off-market,” that it undervalues Xerox stock, and that it gives majority control to Fuji without providing a premium to Xerox shareholders.

Keep those stops tight
Todd “Bubba” Horwitz

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Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.