Xerox is sliding after being sued by one of its largest shareholders
- Billionaire investor Darwin Deason has sued Xerox to block its proposed merger with Fujifilm.
- Shares of Xerox sank more than 3% on the news; Fujifilm was also down.
Shares of Xerox plunged as much as 3.35% Tuesday morning after one of its largest shareholders, billionaire Darwin Deason, filed a lawsuit against the company to block its proposed merger with Japan's Fujifilm.
The 78-year-old who sold Affiliated Computer Services to Xerox in 1988 for $6.4 billion hopes to halt the proposed merger between Xerox, of which he owns a 3.37% stake, and competitor Fujifilm."The transaction must be stopped dead in its tracks," Deason's suit, filed Tuesday, reads. "T he value of Xerox as a standalone company ... is significantly greater than the value being provided to the company and its shareholders as part of the proposed transaction."
Both Deason and billionaire activist investor Carl Icahn, the second-largest Xerox shareholder, on Monday voiced their disapproval of the merger in a letter to shareholders , saying the $6.1 billion deal "dramatically undervalues" the company.
"We urge you - our fellow shareholders - do not let Fuji steal this company from us," the two wrote. "there is still tremendous opportunity for us to realize value on our own if we bring in the right leadership."
Under the proposed terms of the team, the two companies would merge to form one combined company, with Fujifilm shareholders owning a 50.1% majority stake.
Both Xerox and Fuji leadership support the deal. Xerox said in a statement that the proposed merger " represents compelling strategic and financial value for Xerox shareholders."
Shares of Xerox were down 1.84% at the time or writing. Fujifilm was down 3.23%.