The ongoing battle for control of the future direction of Xerox between two billionaire investors – Carl Icahn and Darwin Deason – and the Xerox Board has taken a sensational new twist, with the CEO and Board back in position just a day after they were sacked.
CEO Jeff Jacobson and the Board had been due to go on Thursday under a settlement reached by the two renegade shareholders, however the settlement agreement expired, leaving the positions at the top unchanged.
Xerox says: “As previously stated, the agreement would have become effective upon execution of stipulations discontinuing the Deason litigation with respect to the Xerox defendants. In the absence of such stipulations, the agreement expired at 8:00pm."
It seems the U-turn resulted from existing Board requiring complete assurances that they would be protected from any and all legal actions related to their activities leading to the Fujifilm sale.
The Xerox saga is becoming a goldrush for lawyers, who are now expected to be appointed in even greater numbers as writs fly between the billionaire investors and the Board.
Deason and Icahn reacted with fury to the Board staying in place, penning a both-barrels open letter to Xerox shareholders, saying the Board had ‘once again intentionally violating their fiduciary duties to Xerox shareholders by pursuing their own brazen self-interest’.
And the battle has now become personal, with the duo now pledging to hold the Xerox directors ‘fully and personally liable’ over the coming months. In their letter they say, “Similarly, we intend to see that Fujifilm is held fully liable as an aider and abettor of the continuing breaches of fiduciary duties by those directors.”
John Visentin had been lined up as the new CEO, in fact he has twice in the last six months had to put his briefcase down, apopinted first in December only for the Board to change its mind and stick with Jacobson, and again last week when he was due to step into the role on Friday, only to see Jacobson and the Board regain control. Visentin has been retained by Deason and Icahn since March, tasked with recruiting other shareholders to their positions. He is a long time top exec with private equity fund Apollo Global management, which is reportedly interested in buying Xerox.
The titanic battle for control of Xerox kicked off when two major shareholders felt the deal struck by the board to sell to Fujifilm undervalued their shareholdings. The Board, and many industry analysts, believe the deal represents the best way forward for Xerox in an intensely competitive environment.
Under the deal Fujifilm will gain 50.1 per cent of the A$10bn business at US$9.80 per share
The letter from Icahn and Deason went on, ‘This inexplicable turn of events occurred for one reason only: the Xerox board recklessly refused to follow through with the leadership and governance changes we agreed to, demanding unprecedented additional approvals for their own personal self-interest.
‘An expansive release from us and the company was not enough. Fully insured, robust indemnification rights were not enough. The Xerox board declined to take the actions they unanimously approved as in the best interest of Xerox shareholders unless they obtained additional unprecedented protections from the court, which all parties (and the judge!) agree are not required under applicable law.”
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