Xerox Partner: Sales Up Despite Drama Over Company's Future
A key channel partner said the latest development in the Fujifilm-Xerox saga – that Fujifilm is suing Xerox for $1 billion-plus – is likely to have no impact on sales.
Josh Justice, president of Just-Tech, in LaPlata, Md., said the last six months of announcements, rebuttals, and court fights, have taught him that it just doesn’t affect sales performance.
’Our Xerox hardware equipment sales are actually up year-to-date,’ Justice told CRN. ’I was personally surprised back in January with the first announcement, and with the latest news it sort of loses some of its shock factor. Its clear, no matter how this ends up, there will still be a Xerox making multifunction printers and copiers and there will still be a need for channel partners.’
Fujifilm yesterday filed a lawsuit in U.S. District Court in Manhattan, in which it blames activist investors for scuttling the deal with Xerox. The Japanese company said it is suing Xerox for $1 billion in damages for its lost profit opportunities.
Two men, Carl Icahn and Darwin Deason, waged a months-long battle to break up the deal and unseat ex-Xerox CEO Jeff Jacobson, who negotiated it.
On May 13, citing a failure to provide financial records, Xerox did indeed back out of the redemption agreement and a share subscription agreement it had negotiated with Fujifilm. At the time, Xerox said it was doing do because Fujifilm had failed to provide promised financial records. However in their complaint, Fuji called that stated reason ’false and pretextual.’
’The true reason for Xerox’s purported termination of the SSA and RA is the simple truth that the Xerox Board changed its mind – as induced by Deason and Icahn,’ Fujifilm wrote in their complaint.
Xerox, Fuji says, has deprived Fujifilm shareholders of the billions of dollars in synergies that both parties expected, and in doing so has damaged Fujifilm in an amount ’estimated to exceed $1 billion.’
In its own statement, released hours after Fujifilm filed suit, Xerox rejected the notion that it was in breach of contract when it stepped away from the deal.
’We remain extremely confident that the former Board correctly exercised its clear contractual right to validly terminate the transaction agreements due to, among other things, the continuously expanding unresolved accounting issues at Fuji Xerox,’ the statement reads. ’Xerox will vigorously defend its decision and pursue any and all remedies available to Xerox arising from Fujifilm’s mismanagement and misconduct.’
Under the terms of the deal announced in January, Fujifilm would have given Xerox 100 percent ownership of Fuji Xerox, and Xerox shareholders would have received a $9.80 per share dividend payment – financed through debt of the newly formed company. In exchange, Fujifilm would own 50.1 percent of the American copier icon.
Icahn and Deason demanded a better deal, and sued in New York state court to block it from happening. The pair convinced a New York judge to order an injunction that halted the sale on April 27. Xerox capitulated to Icahn and Deason about two weeks later.
In addition to the $1 billion in damages, Fuji is also demanding Xerox pay a $183 million termination fee, as outlined in their share subscription agreement, negotiated as part of the proposed sale.