According to a Bloomberg report, Judge Barry Ostrager ruled that Xerox’s CEO may have made the move to save his own job at the expense of a deal more beneficial to shareholders. He said the deal with Fujifilm severely limited the Norwalk-based company’s effort to pursue an acquisition deal involving another potential buyer that had the capacity to make a cash payment to Xerox investors.
The judge criticized Xerox CEO Jeffrey Jacobson’s enthusiasm in pursuing the Fujifilm deal, pointing out that “Jacobson, having been told on Nov. 10 that the board was actively seeking a new CEO to replace him, was hopelessly conflicted during his negotiations of a strategic acquisition transaction that would result in a combined entity of which he would be CEO. There is ample evidence that he collaborated with Fuji to make himself indispensable to the transaction.”
The judge’s ruling affirmed the concerns raised by investor Darwin Deason, who filed a lawsuit claiming that Jacobson acted unilaterally in securing the Fujifilm deal, which resulted in the preservation of his job. “I am grateful the court acted to protect the shareholders of Xerox,” Deason said in a statement. “Beyond that, we still have a lot of value to create at Xerox and I intend to focus my efforts there.”
Xerox’s board of directors issued a statement pledging the company will “immediately appeal the court’s decision.”