Never mind: Xerox board, management reverts back after settlement agreement expires

Jeff Jacobson, CEO, Xerox, is back at the helm. But for how long?

Less than two-days after notifying the press about Xerox’s best interest being served with a new CEO, chairman and board members, the board of Xerox Corp did an about-face Thursday night. The company said its current board members, chairman, and CEO, Jeff Jacobson, would remain after a legal settlement with activist shareholders Carl Icahn and Darwin Deason lapsed. The May 2 announcement,  which named a new CEO and six new directors, included “terminating or restructuring Xerox’s relationship with Fujifilm and the proposed transaction with Fujifilm.”

Previously, Icahn and Deason had charged Jacobson worked the deal with Fujifilm to merge Fujfilm Xerox with Xerox, in an effort to preserve his CEO job. They contend the merger undervalues Xerox.

Icahn and Deason confirmed the settlement pact with Xerox has expired and promised to continue the fight, as shown by the statements below.

Dissident Shareholders Issue Statement

Carl Icahn and Darwin Deason issued this statement in an open letter to Xerox shareholders:

“At 8:00 pm ET on Thursday night, the settlement agreement we entered into with Xerox and a unanimous Xerox Board earlier this week expired without the Xerox Board permitting the agreement to take effect, once again intentionally violating their fiduciary duties to Xerox shareholders by pursuing their own brazen self-interest…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.”

Xerox released their own press releases, shown below:

Xerox Settlement Agreement with Carl Icahn and Darwin Deason Has Expired

Xerox Board to Consider Options to Achieve Optimal Outcome for Company and its Shareholders

As a result, the current Board of Directors and management team will remain in place. Xerox and its Board of Directors recognize the uncertainty caused by the developments of the past several days among the company’s investors and other stakeholders. The Xerox Board and management team remain focused on driving continued improvement in financial and operational performance, and will consider all options to create value for the company and its shareholders.

Xerox Files Appeal Against Court’s Decision to Enjoin Fuji Xerox Combination

NORWALK, Conn.–(BUSINESS WIRE)–Xerox (NYSE:XRX) today announced that it has taken an appeal from the decision enjoining the Fuji Xerox combination. Xerox strongly believes that the decision is contrary to well-established New York law vesting the Board of Directors of Xerox with the business judgment to enter into the transaction agreement with Fujifilm (the “Transaction”) and that the decision to approve should rest with Xerox’s shareholders, not the Court.

The appeal disputes the court’s finding that the Xerox Board breached their fiduciary duties in approving the Transaction. To the contrary, the Xerox Board unanimously authorized the Transaction after months-long discussions and deliberations, and based on its good faith judgment that the Transaction represented the value-maximizing alternative for the company’s shareholders.

Or, to sum it up with the now-classic words of Emily Litella: