In House - The FindLaw Corporate Counsel Blog

Xerox Loses CEO Over Lawsuit Settlement

It was a clash of titans that left Xerox without a head and the company teetering in the balance.

Jeff Jacobsen, the embattled chief executive officer, resigned under pressure from major shareholders who sued to block a proposed merger. A judge enjoined the merger with Fujifilm, saying Jacobson was "hopelessly conflicted" because he pushed the deal to save his job.

Carl Icahn, the billionaire investor, won the battle for control of the struggling company. But as it sometimes goes in mythology, time will tell whether the legend endures.

Out With the Old

Backed by Ichan, Darwin Deason sued to push out Jacobsen and kill the Fuji deal, saying the proposed $6.1 billion merger "dramatically" undervalued Xerox. The two investors hold about 15 percent of the company's stock.

After the court injunction, the parties settled. Jacobson and six board members are out; a new CEO, chairman and board are in.

It "marks a watershed moment for corporate governance generally and for Xerox specifically," Icahn said. 

Keither Cozza, CEO of Icahn Enterprises, will take over as chairman. John Visentin, who consulted Icahn Enterprises in the battle for Xerox, will be the new CEO.

In With the New

No sooner than the dust settled, another suitor approached Xerox about a deal. According to reports, Apollo Global Management is interested in acquiring the company.

With the overture, the Fuji merger appears dead in the water. Visentin has good history with Apollo, which invested in other companies he ran. Reuters reported "there is no certainty" Apollo's move will lead to a new deal. Fuji has said it will challenge the court order blocking the merger.

However, Icahn is firmly in control of the situation. Xerox said the new executives and board are already "evaluating all strategic alternatives to maximize shareholder value."

Related Resources: