A man is silhouetted in front of Fujifilm Holdings' logo ahead of its news conference in Tokyo, Japan January 31, 2018.
The planned sale of Xerox Corp to Japanese rival Fujifilm Holding Corp has been temporarily blocked by a NY judge who determined the chief executive officer behind the deal was trying to preserve his own job.
Activist investors Carl Icahn and Darwin Deason were no doubt celebrating their recent win over Xerox this weekend after the courts scuppered its plans to merge with imaging giant Fujifilm. They are discussing a higher price after Xerox, under pressure from top investors, asked to renegotiate the terms.
Xerox had argued in a court filing that Jacobson didn't have a conflict of interest and NY law didn't allow Deason and his lawyers at King & Spalding to second-guess the board's business judgment.
According to a Reuturs report, Ostrager said that Xerox chief executive Jeff Jacobson was "hopelessly conflicted" when he was in the process of agreeing the proposed $6.1bn (£4.5bn) takeover deal with Fujifilm.
The company said it believes the merger will greatly benefit the shareholders of both Fujifilm and Xerox, and that it will consider all options, including whether to appeal the decision. "We disagree with, and are disappointed by, the judge's ruling".
"We strongly believe that all Xerox shareholders should be able to decide for themselves the operational, financial, and strategic merits of the transaction".
Xerox said it would appeal Ostrager's decision, adding that the transaction is in the best interest of the company and shareholders. "Xerox believes Mr. Deason's litigation distorts numerous facts regarding the proposed combination with Fuji Xerox", stated Xerox Chairman of the Board Keegan.
In Deason's lawsuit, he argues that he has the right to nominate directors to Xerox's board despite missing a deadline because the current board had made significant decisions and disclosures to stockholders after the deadline for nominations. And, at the same time, Fuji and Xerox remain in talks on a possible transaction agreement that would satisfy the majority of Xerox shareholders, including Icahn's and Deason's combined 15% stake.
Icahn and Deason, who own a combined 15 percent of the US printer and copier maker, have called the deal structure "tortured" and "convoluted".