Icahn, Deason Open to Bids for Xerox of $40 a Share or More

(Bloomberg) -- Carl Icahn and Darwin Deason continued their efforts to shake up Xerox Corp., saying they would consider any cash bid for the company of at least $40 a share.

The billionaire investors, in a combative letter to shareholders Monday, again pressed for Chief Executive Officer Jeff Jacobson to resign. They said they couldn’t see another offer materializing before he left.

Icahn, Deason Open to Bids for Xerox of $40 a Share or More

“To put to rest the speculation regarding our intentions, we are comfortable stating that an all-cash bid at a minimum of $40 per share, would require our serious consideration,” according to the letter. “We also see the possibility of similar or better value in a standalone Xerox with John Visentin at the helm as CEO with the support of a new conflict-free board.”

An offer at that price would be about a 40 percent premium to Xerox’s current market valuation. Shares rose 0.3 percent to $28.46 in New York Monday, valuing the company at about $7.2 billion.

A representative for Xerox declined to comment.

Xerox and the two investors, who control more than 13 percent of the company, are battling over a proposed $6.1 billion deal that would hand control of the former U.S. office giant to Fujifilm Holdings Corp.

Court Orders

Icahn and Deason on Monday posted a $150 million bond to preserve two preliminary injunctions issued by a New York state judge in litigation brought by Deason against the board, according to court records. The first court order temporarily bars Xerox from holding a shareholder vote on its proposed takeover by Fujifilm, while the second deals with the company’s advance notice bylaws.

“This means that the lame duck board may no longer deny shareholders their fundamental right to nominate an alternative slate of directors who are committed to enhancing value for all shareholders rather than rushing into a no-premium deal with Fuji to further their own personal interests,” the pair said in their letter.

Icahn and Deason have opposed the Fujifilm transaction from the start. Deason sued Xerox in February to block the proposal, accusing Jacobson of acting without authorization to strike a deal that preserved his job at shareholders expense. He also claimed in the lawsuit that the company’s board breached its fiduciary duties.

Settlement Scratched

After the judge temporarily blocked the Fujifilm deal, Xerox and the investors reached a settlement last week that would have seen Jacobson and six board members step down. Just days later, Xerox reversed that plan, saying the settlement deal had expired without being implemented. The company is appealing the court decisions.

The appeals court on Monday denied Xerox’s request to fast-track its deliberations, instead putting the case on its calendar for the first week of September, according to the ruling. The court allowed Xerox to take steps to seek regulatory approval of the Fujifilm deal while the case is pending.

Icahn and Deason repeated their calls Monday for Xerox to scrap the Fuji transaction, fire Jacobson, hire Visentin, and have the board resign.

“We are aware of the market speculation regarding a rival bid by Apollo and we are confident that other potential buyers are waiting in the wings to kick the tires -- but we do not see any possibility of an alternative bid materializing unless and until the lame duck board and the lame duck CEO relinquish their death grip on Xerox,” they said.

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