Xerox CEO accused of seeking Fujifilm tie-up against board's instructions

In January, Xerox and Fujifilm decided their best chance of surviving the printer-copier downturn was a multi-billion dollar mutual rescue package led by the Fuji Xerox joint venture. Now, a lawsuit alleges Xerox CEO Jeff Jacobson rushed into the deal against instructions from the company's board.

The lawsuit was filed in a New York court by a shareholder, Darwin Deason, who along with activist investor Carl Icahn owns 15 per cent of Xerox shares, according to Reuters.

At the bottom of the lawsuit is the complaint that the January deal undervalues Xerox, since it gives Fuji control “without spending a penny” (according to a copy of the complaint sent to The Register).

The 700-page-plus complaint (PDF) alleges that there's been a 20-year agreement between Xerox and Fujifilm that "made it 'virtually impossible' for Xerox to sell itself to anyone other than Fuji" – and Deason further alleges the agreement was never disclosed to shareholders.

Deason also names the rest of the Xerox board as defendants in the case.

A separate complaint (PDF) seeks to change board appointment processes to give Deason a chance to nominate directors in spite of missing a deadline for nomination, on the basis that the Xerox-Fuji agreement was also disclosed after the nomination deadline.

Xerox chair Robert Keegan told Reuters Jacobson was acting with its authority and knowledge, saying: "Xerox CEO Jeff Jacobson was fully authorised to engage in discussions with Fujifilm and Fuji Xerox on the proposed combination", and that the complaint "distorts many of the facts regarding the proposed combination with Fuji Xerox." ®