Xerox issues rebuttal to "misleading and inaccurate" letter by Icahn, Deason

Xerox is responding to a letter written by two billionaire investors who are warning company stockholders that the Xerox-Fuji merger is a scheme. (WHAM photo)

Norwalk, CT (WHAM) - Xerox is responding to a letter written by two billionaire investors who are warning company stockholders that the Xerox-Fuji merger is a "scheme."

Last month, Xerox announced its deal with Fujifilm that will give Fujifilm more than half of the combined company. Xerox shareholders will "receive a $2.5 billion special cash dividend, or approximately $9.80 per share[1], and 49.9% of the combined company; Fujifilm to own 50.1%." It combines the previous Fuji Xerox Joint Venture with Xerox.

In a response published Tuesday to the open letter written by Carl Icahn and Darwin Deason, Xerox called their account "misleading and inaccurate" and said it warranted a written response to "ensure the facts are clear."

The response lays out rebuttals to five main claims put forth by Icahn and Deason in the letter: the undervaluing of Xerox in the Xerox-Fuji deal, suggesting Xerox should terminate the joint venture agreements, Xerox shareholders potentially becoming "passive minority" owners, savings being realized without completing the merger, and Xerox's revenue and margins being in decline for the last three years.

All of those arguments and rebuttals can be read here.

The statement concludes by saying Icahn and Deason "fail to provide an actionable plan or any cogent ideas to make their scheme a reality. Following their playbook would be both highly irresponsible and unlikely to succeed, particularly given the terms and constraints of the existing Fuji Xerox joint venture agreement, and the realities of today’s competitive environment."

"The combination of Xerox and Fuji Xerox will create a stronger, more competitive company with enhanced growth prospects. The opportunity for Xerox shareholders to benefit from ownership of the combined company, as well as the substantial dividend to be paid upon closing, represents the creation of significant value for Xerox shareholders. The Board remains committed to maximizing value for all shareholders and securing the future of Xerox."

Xerox announced last month it was ending its downtown Rochester lease of Xerox Square early and would transition several hundred of its 3,400 employees in Monroe County to its campus in Webster by this summer.

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