Xerox Hasn't Discussed Fuji Deal With Carl Icahn, Darwin Deason

Xerox Corp XRX announced Wednesday a $6.1 billion merger with its Fuji Xerox joint venture — a deal never discussed with two of the firm’s largest shareholders, a company spokesperson told Benzinga Thursday.

Carl Icahn and Darwin Deason together hold more than 15 percent of shares and recently pressured Xerox leadership to explore strategic alternatives. Not two weeks ago, the activist investors demanded management to “make the tough decisions necessary to prevent the Xerox ship from sinking” — or get out.

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The threat of a board shakeup may have precipitated the Xerox-Fuji deal, which the Street has speculated since the announcement of a joint venture.

The transaction, unanimously approved by the boards of both parties, would yield an entity titled “Fuji Xerox” and generating $18 billion in annual revenues. The terms grant Xerox shareholders a special cash dividend around $9.80 per share and 49.9-percent ownership of the united entity. Fujifilm would own 50.1 percent.

Deal closure now depends on a late-2018 shareholder vote, making the approval of Icahn and Deason critical.

If dissatisfied with the terms, the investors could wage a campaign urging shareholders to block the merger — a feat not beyond Icahn’s power. He recently pressured Sandridge Energy, Inc. SD to abandon its $746 million acquisition of Bonanza Creek Energy, Inc. BCEI.

Requests for comment from Icahn and Deason were not returned at time of publication.

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