Shareholders Icahn and Deason Purge Xerox CEO and Board, to Renegotiate Fuji Deal

John McIntyreby John McIntyre

Family fights are often the ugliest of all confrontations, and the slugfest between Xerox and Fuji on one side attempting to execute a previously announced complex merger of the two partners, and a shareholder faction led by activist shareholders Carl Icahn and Darwin Deason on the other, erupted into a gloves-off, corporate street brawl of epic proportions – the kind of bout that stops passersby and those salivating for a knockout.

Editor’s Note: This is a continuously changing story; keep up with the ongoing saga here.


Those hoping for a KO got one – on May 1, Xerox announced that CEO Jeff Jacobson had resigned, replaced by Icahn senior advisor John Visentin, and that six of the nine members of the Xerox board of directors had also resigned, replaced by a slate of directors aligned with Icahn. The purge resolves, in part, a grave legal pickle Xerox leadership found itself in after the company was whacked with three New York Supreme Court injunctions, sought by an aggregation of shareholders led by Icahn and Deason, which stopped the merger in its tracks and, based on evidence presented in court, placed Jacobson and Xerox’s board of directors in severe legal liability in connection with the means and process used to concoct the proposed merger transaction. Less than 48 business hours after the court injunctions were issued by Judge Barry Ostrager, Xerox leadership had little choice but to accept unconditional surrender and submit to whatever terms were dictated by Icahn and Deason.

In a ruling dated April 27, Judge Barry Ostrager of the New York Supreme Court issued a preliminary injunction, including separate orders petitioned by Deason (Xerox’s third largest shareholder, who claims to have a $600 million investment in the firm), Icahn (Xerox’s largest shareholder), and several pension funds that own Xerox shares, which had filed a consolidated class action suit against defendants Xerox and Fuji to block the $6 billion-plus “merger” of the two companies announced January 30.  We won’t rehash the basics of the original deal here – we are sure you either know already or can look up the details.  Besides, the real melee began when Icahn and Deason, et al., almost immediately began angrily contesting the terms of the deal and took their quarrel to court.

Unlike many sedate and sterile corporate legal disputes, this clash turned harsh and personal quickly. Icahn, well known for decades in corporate circles as a hard-nosed and tenacious negotiator in large M&A deals where he has an interest, became the face of the opposition to the Xerox/Fuji merger, although Deason’s name leads the lawsuit list. Icahn specifically and publicly targeted Jacobson for replacement, and Deason and the other petitioners filed motions seeking three court injunctions, including:

    • A preliminary injunction order enjoining (blocking) the deal;
    • A mandatory injunction order requiring the Xerox board to waive the company’s advance notice bylaw that would have required Deason (or anybody else) to propose a new slate of independent directors for Xerox’s board (to run versus existing board members) by December 11, 2017 – more than a month before the merger announcement was made. This bylaw guaranteed that the existing board, which knew of and already approved the deal, would likely be in place at the start of the annual shareholder meeting where the deal was to be put to a vote. Icahn had already filed a slate of four of his choices for directors, challenging the four longest-serving of Xerox’s board of nine members, one of whom was Jacobson, and also requested that the board extend the bylaw deadline, which was denied by the board.
    • These plaintiffs also sought an injunction order to postpone a shareholder vote on the agreement until a date after the annual shareholder meeting.

In short, the goals of the petitioners were clear – stop the agreement outright in its current form and provide the petitioners the time and space to either rework or kill the deal, along with a move to purge the Xerox management team that engineered and approved the transaction.

Looking behind the curtain

A two-day evidentiary hearing was held by Judge Ostrager on April 26 and 27, which included live testimony from eight witnesses, four depositions submitted on videotape, and “voluminous submissions” made by the parties connected with the motions. The judge noted the following facts in his ruling:

    • Per the agreement, after the deal closed, Xerox CEO Jeff Jacobson would have been CEO of the combined company, and five of the existing Xerox directors and Jacobson would have been members of the new entity’s board of 12 members, and there was a guarantee that those existing board members (and Jacobson) retain their seats for five years after the deal was approved.
    • After press reports surfaced in mid-January, but before the official announcement on January 31, Deason made a written request to the board demanding the disclosure of the merger details.
    • Deason and Icahn are sharing the legal expenses associated with the lawsuit.
    • Fuji would have received a $183 million breakup fee if the deal failed to close.
    • Icahn professed a strong desire to have Xerox sold in an all-cash transaction at a premium over the firm’s market value – and not in any merger or stock swap arrangement.
    • Fuji had been dealing with an internal accounting scandal since April 2017, which forced the firm to restate its financials for 2017 and several years prior – and this incident also ultimately triggered Xerox to restate its financials for Q1 2018. Further, the merger plan stated that Fuji was to deliver final audited statements to Xerox by April 15, 2018 – which the judge inferred could trigger further negotiations between Fuji and Xerox. The judge also noted that it was unclear, according to Japanese law (which governs the Fuji-Xerox joint venture) if Xerox could have withdrawn from the agreement because of the scandal.
    • The judge pointed out that “the weight of the evidence” presented at the hearing along with Xerox’s 2017 financial performance “established that on and before January 31, 2018, there was no exigent necessity for Xerox to engage in any change of control transaction,” inferring that Xerox could have reasonably accommodated requests to extend the bylaw deadline and the date of the shareholder vote. He also pointed out that Fuji and Xerox had explored merger and acquisition options for decades prior to this deal.
    • Xerox’s Jacobson met with Fuji’s President and COO Kenji Sukeno and Fuji’s Chairman and CEO Shigetaka Komori in early March 2017, at which time Fuji proposed acquiring Xerox;  follow-on detailed discussions continued in March and April 2017. Fuji conveyed that it understood Xerox needed a 30 percent premium over its stock price for a deal and handed Jacobson a letter the next day containing an outline of a proposed transaction.
    • On March 16, 2017, Xerox’s board of directors met to discuss the Fuji offer, and had engaged Centerview Partners as a financial advisor, which presented an economic analysis of an all-cash deal.
    • Following the board meeting, Jacobson sent Fuji a letter reiterating that “we would be prepared to enter into discussions only,” if the Fuji offer reflected an “appropriate premium to our current share price,” and that it was a 100 percent cash deal. Judge Ostrager noted that the board made clear to Fuji that Xerox was not in any “immediate or urgent need of a strategic combination.”
    • On May 15, 2017, Jacobson and two of his direct reports had dinner with Icahn, during which Icahn told Jacobson that he did not believe that Jacobson was the right person to be Xerox CEO and that he wanted Xerox sold. Further, Icahn told Jacobson that he would be fired if he couldn’t work a deal; Jacobson shared the details of this meeting with the board.
    • Interpreting these facts, Judge Ostrager wrote “In short, the parameters of the change of control transaction under discussions in early 2017 were nothing like the terms to which the Xerox board ultimately agreed to in January 2018.”
    • After the dinner meeting and the related advisory to the board, Fuji told Xerox that it could not “advance strategic discussions,” at this time until the Fuji Xerox accounting scandal was resolved and that a purchase of all of Xerox’s outstanding shares was “too expensive.” Jacobson thereafter worked with Centerview to craft a plan enabling Fuji to make a cashless purchase of Xerox.
    • Jacobson testified that he was authorized by Xerox board chairman Robert Keegan to explore alternatives to an all-cash deal, but that the plan conjured up by Jacobson and Centerview, presented to Fuji in June 2017 had not been revealed to the full board. Judge Ostrager’s synopsis states that “For all intents and purposes, Jacobson’s cash-free acquisition concept took off the table any kind of all-cash transaction with Fuji,” despite the knowledge that Fuji had cash reserves of $8 billion.
    • Jacobson ignored Fuji’s plea for delay in the discussions and pressed Fuji for a July 2017 meeting to discuss the new, cash-free proposal.
    • It was only in July that the full board, including Icahn, became aware of Jacobson’s efforts to close a deal that was not all cash. When Icahn learned of the new proposal terms, he told Keegan that he opposed the deal and demanded that a search committee be formed to find a replacement for Jacobson. Keegan then suggested to Jacobson that Fuji buy out Icahn’s stake in the company.
    • During the summer of 2017, the board – unanimous in its opinion – became disenchanted with Jacobson’s performance, formed a “scan committee” and hired a search firm to find a replacement. The “scan committee” interviewed candidates in October and November 2017 and had identified a candidate that was “head and shoulders” better than Jacobson – and even discussed compensation terms and a start date of December 11.
    • Jacobson testified that he was unaware of the efforts to replace him prior to November 10, when Keegan advised him that he might be replaced; however, Judge Ostrager termed this testimony “suspect” given the large number aware of or involved in the “scan committee’s” effort. Further, the same day, Keegan advised Jacobson that it was the express and unanimous decision of the board that he desist from all further acquisition discussions and meetings planned for later that month with Fuji.
    • On November 12, Jacobson emailed to his personal email account copies of his employment agreement and pension plan. Keegan also testified that he learned that Jacobson had communicated his “situation” to Fuji.
    • Fuji became increasingly interested in the concept of a “cashless” offer to acquire Xerox and pressed Jacobson to keep a planned November 14 meeting, which Keegan agreed to, though only one other member of the board was aware of this action. After the November 14 meeting, Keegan further agreed to let Jacobson travel to Japan on November 20 to meet with Fuji.
    • On November 21, Jacobson discussed his “situation” with Fuji and informed Fuji that Xerox needed a term sheet by November 28. Prior to this meeting, a Fuji executive texted Jacobson that the upcoming meeting would “… focus on hearing the situation surrounding you and XC and what we can do … but basically [Fuji’s Chairman and CEO Shigetaka Komori] is ready to send the term sheet unless something unexpected happens.” It should be noted that the court presented the critical text of this message in bold type in its ruling. Jacobson then texted Centerview that Fuji told him that there was “no deal without me.” Fuji presented its term sheet on November 30, with the general structure of a non-cash deal for 50.1 percent of Xerox.
    • The court’s ruling states directly, “At no time prior to a January 24 teleconference between Keegan and Komori did any [italic emphasis by the court] Xerox director participate in any [italic emphasis by the Court] meeting with any Fuji executives – the meetings included only Jacobson.
    • The Fuji term sheet incorporated a target date of January 31, 2018, for the closure or a definitive agreement – set to coincide with the Xerox Q4 2017 earnings announcement. In December, the Xerox board established a “transaction committee,” which subsequently requested that Fuji increase the previously agreed to $2 billion shareholder dividend clause in the deal to $2.5 billion, requested changes in governance terms, and demanded that there not be co-CEOs as Fuji’s term proposal had laid out, but only one CEO, Jacobson, who the board had unanimously agreed to replace only weeks before. Fuji was receptive to the demand since Jacobson was the one who had arranged a Fuji-friendly non-cash deal. Further, Jacobson was the only Xerox director known to Fuji.
    • Xerox’s outside counsel and Centerview had told the board that Jacobson had to be the CEO of the combined companies. The court suggests in the decision that Keegan’s insistence that Jacobson’s role as CEO of the much larger company assumed that Komori would replace Jacobson if he failed to perform. The court says this explanation is “perplexing.”
    • On January 24, only one week before the proposed public announcement of the transaction, Centerview emailed Fuji, raising concerns about the incomplete financial due diligence process with Fuji Xerox and that “the current financial projections we have created together do not create enough value for [Xerox] shareholders,” and that a January 31 announcement “was not possible.” Fuji responded harshly, writing “Fujifilm will walk [a]way from this deal if you don’t keep this announcement schedule.”
    • Financial advisor Centerview, which maintained communications with Jacobson during the rush to design the deal, issued its “fairness” opinion on January 30 (the day before the public announcement) – for which it was paid $10 million, and was also aware that it would receive an additional $40 million only if the transaction was consummated.

It only took a few hours for Judge Ostrager to make a decision.

Jacobson’s conduct is the lynchpin – and the board too

In his April 27 ruling, Judge Ostrager led with a scathing rebuke of CEO Jacobson, stating “The lynchpin of this Court’s ruling turns on the conduct of Xerox CEO Jeff Jacobson … that granted control of an iconic American company to Fuji without any cash payment … to Xerox shareholders, and the Board’s acquiescence in Jacobson’s conduct.” The Court states that despite contrary testimony from Jacobson and Keegan, “… it is simply counter-intuitive and not credible to the Court that Jacobson was not conflicted with respect to his dealings with Fuji … it is equally counter-intuitive and not credible to the Court that Jacobson did not both explain his personal circumstances to Fuji and attempt to enlist Fuji’s assistance in preserving his position … .” The ruling noted that in one text from Fuji to Jacobson, Fuji commented that they and Jacobson “be the one team to fight against [their] mutual enemy” in reference to Icahn. Jacobson replied to that message by writing, “We are aligned my friend.” Judge Ostrager explained that Keegan, another Xerox director, and Jacobson – all of whom “owed a duty of loyalty to Xerox shareholders” – saw this message.

Ostrager then takes Keegan to task, writing “… it was a breach of fiduciary duty for Keegan to authorize Jacobson to continue to be the primary interface to Fuji after Keegan both told Jacobson he could be immediately terminated and, for that reason, he should cease communications with Fuji about any transaction.” (We strongly urge you to download and read the entire opinion issued by the Court – which contains too many juicy details to repeat here. )

Ostrager then looked at the bigger picture, writing “The circumstance that the transaction was ultimately approved by the Board … takes this transaction out of the realm of cases in which courts defer to the business judgment of independent directors … This transaction was largely negotiated by a massively conflicted CEO in breach of his fiduciary duties to further his self interest and approved by a Board, more than half of whom were perpetuating themselves in office for five years without properly supervising Xerox’s conflicted CEO … The proposed value proposition of the transaction … are highly subjective.” Ostrager then notes, “The arresting irony of the transaction” is that while it was rushed to completion, there is little evidence that there was an immediate necessity to close the deal on the accelerated timeline pushed by Fuji at the urging of Jacobson.

Judge Ostrager didn’t let Fuji off the hook either, writing, “Certainly, Fuji cannot be faulted for taking advantage of the opportunity Jacobson presented Fuji which, in Komori’s words, enabled Fuji to “take control of Xerox without spending a penny.” However, Ostrager added, “… that does not mean Fuji did not aid and abet a breach of fiduciary duty.” Later, Ostrager explained “Plaintiff’s additional claim that Fuji aided and abetted the directors’ breach of fiduciary duty is … likely to succeed on the merits,” and that “One that aids and abets a breach of fiduciary duty is liable for that breach as well … .” Ostrager also noted that Fuji’s senior management was well aware that the proposed deal disproportionally favored Fuji at the expense of Xerox shareholders.

The decision explains the legal standard for qualification of a preliminary injunction: a plaintiff must demonstrate:

    • A likelihood of success on the merits
    • The prospect of irreparable harm in the absence of injunctive relief, and
    • A balance of equities in the moving parties favor

Judge Ostrager believes that the Deason, et al., pleading meets these standards, writing that:

    • “The plaintiffs have demonstrated a likelihood of success on the merits of their claim that defendants breached their fiduciary duties as directors in approving the proposed transaction and that Fuji aided and abetted such breach.”
    • “… in the analysis of plaintiff Deason’s motion for an injunction waiving Xerox’s advance notice bylaw deadline — plaintiffs have clearly established irreparable harm and a balance of the equities in their favor. Therefore, both motions for preliminary injunctions are granted.
    • Supporting this decision, Ostrager wrote, “No more evidence of a breach of fiduciary duty need be established than Keegan and Reese [another Xerox director] ignoring a memo characterizing Xerox’s largest shareholder as the “common enemy of Fuji and Xerox.”
    • On Jacobson, Ostrager wrote, “There is ample evidence that he collaborated with Fuji to make himself indispensable to the transaction,” and that the evidence established that “… once [Jacobson] learned that he had been targeted by Xerox’s largest shareholder for replacement and eventually the Board itself, he abandoned the Board’s request to obtain a value-maximizing all-cash transaction and engineered the framework for a one-sided deal that includes Jacobson retaining his position as CEO post-transaction. … [And after his dinner with] Icahn, Jacobson was consistently acting without the knowledge of the entire Board, even after the Board decided … that he immediately cease any further communications and negotiations with Fuji … .” Ostrager added, “Despite the Board’s decision, Jacobson doubled down on his efforts and worked directly with Fuji to ensure a deal that is disproportionally favorable to Fuji, not Xerox.”
    • As to the board, Ostrager wrote, “the director defendants, a majority of whom would have future directorship positions on the Board of the combined entity, acted in bad faith … .”
    • Deason’s motion for a mandatory injunction waiving the advance notice bylaw deadline to enable him to field a competing slate of directors was granted, and “defendants’ refusal to grant Deason’s waiver request is without justification. … The Court also finds that there is a substantial likelihood that [Deason] will succeed at trial in showing that the Board’s primary motivation for adopting the by-laws was entrenchment … The Court therefore grants the plaintiff’s request for a preliminary injunction waiving the advance notice by-law requirement … .” Deason was instructed to propose a slate of directors in the next 30 days.
    • Judge Ostrager also noted that as the value of this transaction to Xerox is in the billions, and since Xerox could conceivably prevail in the end he assigned the plaintiffs an “undertaking” value of $150 million – which the plaintiff(s) have five days to post with the court. Assigning an “undertaking” is a means to prevent frivolous lawsuits – a “table stakes” assessment to the plaintiff in which the party being sued (defendant) could experience a significant loss by the necessity of dealing with a lawsuit.

The surrender and purge

The injunctions had immediate and grave ramifications, which ultimately led to the May 1 leadership housecleaning announcement. The ramifications included:

    • Stopping the Xerox-Fuji deal dead in its tracks – temporarily anyway. For its part, Xerox said it disagreed with the ruling and would appeal. Previously the firm’s board had issued a statement that said, in part, “Jeff Jacobson has always conducted himself with the utmost integrity as CEO and in negotiations with Fujifilm … At no point did he exceed the authority granted to him by the board’s chairman or the full board.” Judge Ostrager believed he had reasonable evidence to conclude otherwise. Xerox could have appealed to the same court for a review of this decision – but it appeared highly unlikely that Judge Ostrager’s opinion would be swayed.
    • That left Xerox to appeal in federal appeals court to quash the injunctions – which would not have been a trivial task. Xerox would have had to convince an appeals court that Judge Ostrager made serious legal errors in his ruling. If the federal appeals court declined to reverse Judge Ostrager’s decisions, then Xerox was left with petitioning the U.S. Supreme Court to intervene – a longshot play. In 2015, only 4.2 percent of the cases going to the federal appeals court were reversed. According to court guidelines, Xerox would have had 30 days to file an appeal – and the petition must be no more than 20 pages long. In most cases, a federal appeal will take more than a year before the final judgment is reached. It was likely impossible that Xerox (or Fuji) would be willing to wait that long to resolve this mess.
    • About a week before Judge Ostrager’s ruling, Xerox’s legal team disclosed in a hearing that the firm was trying to renegotiate the terms of the Fuji deal – a possible avenue of resolution of the melee without going to trial. That move appears to reveal that the company recognized that the announced deal had no chance to be consummated. However, Ostrager’s ruling halted all ongoing negotiations – period.
    • Xerox, failing to have the injunctions quashed, would be faced with going to a full civil trial under Judge Ostrager. That road would have been neither fast nor cheap – and quite risky given the evidence presented and the tremendous cost and fallout of losing such a case. The company had what certainly looked like a losing hand.
    • After the ruling, it also seemed to us that neither Jacobson nor the Xerox board was positioned to survive this process very long. It is hard to imagine that Jacobson could have continued to effectively lead the company given that a federal judge had publicly characterized him as a self-interested actor willing to sell out the company and its shareholders to keep his job, and a leader that the firm’s board had already decided to dump. The situation was not much different for Xerox’s board, which, having been charged with failure to meet their fiduciary duties to the very shareholders that would be voting for their reelection, would have been facing several alternate slates of directors for election at the shareholder’s meeting and personal legal liability if the suit was lost.

The court decision was announced on Friday afternoon, April 27; by the following Tuesday afternoon, effectively less than 48 business hours, Xerox announced that it had reached an agreement, with Icahn and Deason to resolve the proxy contest in connection with the company’s 2018 annual meeting of shareholders, as well as the lawsuit against Xerox and its directors related to the company’s proposed combination with Fuji. The announcement made clear that the Xerox agreement did not affect any claims of the Deason group against Fuji for aiding and abetting. Under the terms of the agreement, the dominoes fell as follows:

    • Jacobson was resigning as CEO and from the board; he was replaced by Icahn adviser John Visentin who was named vice chairman and chief executive officer
    • Keith Cozza of Icahn Enterprises was named chairman
    • Directors Robert Keegan, Charles Prince, Ann Reese, William Curt Hunter, Sara Martinez Tucker and Stephen H. Rusckowski resigned from the board of directors.
    • Xerox will appoint six new members to its board of directors: Keith Cozza, Nicholas Graziano, Scott Letier, Jay Firestone, Randolph Read and John Visentin.
    • Current directors Gregory Brown, Joseph Echevarria and Cheryl Krongard will continue to serve on the board.
    • Icahn will withdraw his slate of director candidates for election at the shareholder meeting and  Xerox will continue to waive the advance notice bylaw until May 30.
    • The 2018 annual meeting of shareholders will be postponed to a date TBD.
    • The deal included a clause that Deason, et al., would drop the lawsuit against Xerox, Jacobson, and its directors, and that Judge Ostrager had to approve the deal before 8 p.m. ET on May 3 – 48 hours after the press release was issued. This compressed time schedule appears to be a ploy to prevent Fuji from filing any motion to kill the deal; any company would be hard pressed to compose an effective court submission in that short window.
    • The prepared Xerox release also explained the path forward. “The company has been informed that subsequent to the agreement becoming effective, the new Board of Directors plans to meet immediately to, among other things, 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.”
    • The agreement between Xerox, Icahn and Deason will be filed with the U.S. Securities and Exchange Commission.

Carl Icahn issued the following blunt 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 … 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.”

Xerox’s release referred to the court’s decision and “the significant risk and uncertainty of a prolonged litigation” involved in continuing to challenge Judge Ostrager’s injunctions and the body of the Deason lawsuit itself. The current board of directors of Xerox issued the following statement about the agreement:

“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.”

Not to mention Jacobson and the directors named in the suit.

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.”

But it ain’t over yet folks. For its part, the next day, Fuji said it would file an objection to the settlement. The firm released a statement saying, “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. We also believe that the Xerox new board of directors has an obligation to comply with the agreements which were unanimously approved … and signed by both companies … .”

So … um … what’s next?

Can Fuji prevent Icahn from shopping Xerox to the highest bidder or the best deal? Any Fuji motion that is based on the terms of the currently signed agreements could be attacked as unlawful and moot contracts because of the bad faith and open admissions of the principal actors – so that seems unlikely. Perhaps Fuji thinks this deal can be salvaged – though it seems highly doubtful that Icahn could negotiate with Fuji, which he refers to as a “partner” (quotations his), and that the court says was less than honorable in its dealings. It is possible that Fuji knows the deal is dead and is suing as a means to gain leverage and extricate itself from its remaining exposure to the Deason suit. In our opinion, either way, the deal is dead. Icahn has a history of successfully removing CEOs of companies he invests in if he believes they are not up to the job – this is simply another notch on his belt.

One press report indicated that HP had contacted Xerox about exploring a possible acquisition or combination – a suitor with the means, motive, and opportunity to leverage Xerox’s marketing and technology strengths to further its strategic campaign in the contractual print/copy market. There could be other suitors – possibly Canon, for example, though it seems that in Icahn’s view, cash talks, everything else walks. Xerox’s current market value is just over $8 billion – not exactly pocket change. Paupers need not apply.

There is no other way to describe how this Xerox/Fuji drama played out – it was a corporate train wreck of epic proportions and an embarrassment to both Xerox and Fuji; a public relations debacle that seriously tarnishes the image of two iconic companies because, on the evidence presented, both of their leadership teams have been revealed to be utterly lacking in leadership.

serves as a senior analyst for BPO Media. With more than 40 years of experience in the printing industry as an analyst, product developer, strategist, marketer, and researcher, he has covered the printing and supplies sectors for prominent market research firms such as Lyra Research, InfoTrends, and BIS Strategic Decisions, and served with major OEMs such as Samsung, NEC, and Diablo Systems/Xerox. McIntyre is the former managing editor of Lyra’s Hard Copy Supplies Journal and has conducted research and consulting engagements examining issues such as market and business strategies, product positioning, distribution channels, supplies marketing, and the impact of emerging technologies.