Fujifilm Holdings said it plans to challenge Xerox’s termination of a $6.1 billion (roughly Rs. 41,500 crores) takeover by the Japanese company, signaling that tensions between the joint venture partners won’t be coming to an end soon.
Xerox plans to file a lawsuit as soon as possible, President Kenji Sukeno said Friday in his first public comments days after the American office products company called off the deal in a settlement with activist shareholders Carl Icahn and Darwin Deason. Still, Fujifilm would also consider a new offer from Xerox, Sukeno said.
“The contract that ties the two companies together is still valid,” Sukeno said at briefing in Tokyo to announce the company’s financial results. “We will push for the legality of it. There was a legal contract that everyone agreed on, and after that a few shareholders wanted to put a stop to it.”
Fujifilm this week disputed Xerox’s “unilateral decision” to scrap a plan for the Japanese company to take control of the once-iconic American office equipment supplier. Icahn and Deason, two of the biggest shareholders who argued the deal undervalued Xerox, succeeded in their bid to stymie the transaction and push out the American company’s chief executive officer.
Sukeno said he wants to explain to Xerox shareholders that the merger with Fujifilm is the only option for the American company to grow and have a future. A combined entity would be more efficient, he said.
Shares of Fujifilm have declined 6.5 percent this year, as investors balked at the company’s plan to take on more of Xerox’s lagging business within the office-equipment industry. The company, which has been acquiring drug and biomedical assets to diversify as its office equipment and documents business stagnates, forecast it will post an operating profit of 200 billion yen ($1.8 billion or roughly Rs. 12,300 crores) in the year ending March 31, 2019. That was below analyst estimates.
Fujifilm owns a 75 percent stake in an office equipment joint venture that it operates in Asia with Xerox. As part of a deal proposed in January, Xerox was to have first merged with the joint venture, and then the Tokyo-based company would take over slightly more than 50 percent of the combined entity.