There’s a major shakeup at Xerox in the wake of the recent fight over the control and direction of the company by two major investors.
Late Tuesday night, Xerox announced that CEO Jeff Jacobson and six board members are resigning as part of an agreement with those investors, Carl Icahn and Darwin Deason, who together control about 15 percent of Xerox’s stock. The board members who are resigning including current Chairman of the Board Robert Keegan. Jacobson will also give up his board seat.
The dispute over the control of Xerox centered in part around Icahn and Deason’s opposition to the proposed takeover of Xerox by Fuji that was announced earlier this year. The two investors felt that the $6.1 billion deal undervalues Xerox.
In the agreement announced Tuesday night, the new Board of Directors plans to meet immediately to 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.”
John Visentin is expected to be appointed CEO of Xerox and Keith Cozza, who is the CEO of Icahn Enterprises is expected to be elected Chairman of the Board.
Officials say the agreement will resolve the pending proxy contest for control of the company at the company's upcoming annual meeting as well as the ongoing litigation against Xerox and its directors related to the proposed merger with Fuji Xerox. The agreement does not affect any claims that Deason has against Fujifilm for "aiding and abetting."
The changes come after a judge in New York City late last week issued a preliminary injunction that temporarily blocked the takeover of Xerox by Fuji. State Supreme Court Justice Barry Ostrager had been quoted as saying that CEO Jacobson sought to conclude the deal even though he was advised to end negotiations.
Visentin was hired by Icahn and Deason in March as a consultant in their campaign to try and block the takeover by Fuji. Most recently, he headed up a Connecticut-based document services company called Novitex. Previously, he was a senior executive at Hewlett Packard and IBM.
The current Xerox Board released this statement:
“After careful consideration of shareholders’ feedback on the proposed combination with Fuji Xerox, Xerox approached Fujifilm regarding a potential increase in consideration to be received by Xerox shareholders. As yet, Fujifilm has not made a proposal to enhance the transaction terms.
Following the court’s decision last week to enjoin Xerox’s proposed combination with Fuji Xerox, the Board considered the significant risk and uncertainty of a prolonged litigation, during which the company would be prohibited from negotiating with Fujifilm, as well as the potential instability and business disruption during a proxy contest. As a result, the Xerox Board of Directors determined that an immediate resolution of the pending litigation and proxy contest is in the best interest of our company and all stakeholders.
This agreement will help ensure that Xerox and its employees will be able to continue to focus on serving customers and building on the company’s financial and operational performance.”
Carl Icahn issued the following statement about the agreement:
“We believe Friday’s decision and this agreement mark a watershed moment for corporate governance generally and for Xerox specifically. With new leadership in place, we believe Xerox will be much better positioned to take advantage of multiple potential value-enhancing opportunities, including restructuring its relationship with Fujifilm, our supposed “partner” whose conduct over the last year is more unbelievable than what you see on fictional TV shows like House of Cards or Billions. Thanks to our efforts and the courage and conviction of Darwin Deason, this is once again an exciting time to be a Xerox stakeholder.”
Darwin Deason issued the following statement about the agreement:
“The future for Xerox is extremely bright. With John Visentin at the helm, receiving support and guidance from Carl Icahn and me, I am confident the alternatives for Xerox and its shareholders will be fully and expeditiously maximized. John is the right leader at the right time for Xerox.”
Jacobson has been with Xerox since 2012. He was named CEO in January of 2017.
According to Reuters, Fujifilm issued a response which said, "We have serious concerns about the announced settlement and we intend to file our objections with the Court shortly...."We believe the combination of Xerox and Fuji Xerox is the best option to provide exceptional value to shareholders of both companies."
Fujifilm also said in its statement that it would appeal an April 27 U.S. court ruling temporarily blocking the Xerox deal.