====Xerox (XRX) terminates transaction agreement with Fujifilm

Xerox terminates transaction agreement with Fujifilm; enters into new agreement with Carl Icahn  

• Xerox announced that it notified Fujifilm that the previously announced transaction agreement to combine Xerox with Fuji Xerox is being terminated in accordance with its terms due to, among other things, the failure by Fujifilm to deliver the audited financials of Fuji Xerox by April 15, 2018 and the material deviations reflected in the audited financials of Fuji Xerox, when delivered, from the unaudited financial statements of Fuji Xerox and its subsidiaries provided to Xerox prior to the date of the Subscription Agreement and taking into account other circumstances limiting the ability of the Company, Fujifilm and Fuji Xerox to consummate a transaction.
• Thereafter, Xerox entered into a new settlement agreement with Carl Icahn and Darwin Deason. The settlement agreement resolves the pending proxy contest in connection with the company's 2018 Annual Meeting of Shareholders and Mr. Deason's litigation against Xerox and its directors. It does not affect any claims of Mr. Deason or other Xerox shareholders against Fujifilm for aiding and abetting.
• Under the terms of the settlement agreement, the following occurred:
  • Xerox appointed five new members to its Board of Directors: Jonathan Christodoro, Keith Cozza, Nicholas Graziano, Scott Letier and John Visentin.
  • Gregory Brown, Joseph Echevarria, Cheryl Krongard and Sara Martinez Tucker will continue to serve as members of the Xerox Board of Directors.
  • Robert J. Keegan, Charles Prince, Ann N. Reese, William Curt Hunter, and Stephen H. Rusckowski each resigned from the Board of Directors of Xerox.
  • Jeff Jacobson resigned from his role as Chief Executive Officer and as a member of the Board of Directors of Xerox.
  • Subsequent to joining the Xerox Board of Directors, Keith Cozza, the Chief Executive Officer of Icahn Enterprises L.P., is expected to be appointed as the new
  • Chairman of the Board of Directors of Xerox, and John Visentin is expected to be appointed as the Vice Chairman and new Chief Executive Officer of Xerox.

-=Xerox (XRX) reported earnings on Wed 31 January 2018 (BMO)

Xerox beats by $0.09, beats on revs; guides FY18 EPS above consensus, revs above consensus

• Reports Q4 (Dec) earnings of $1.04 per share, $0.09 better than the Capital IQ Consensus of $0.95; revenues rose 0.5% year/year to $2.75 bln vs the $2.63 bln Capital IQ Consensus.
• Co issues upside guidancefor FY18, sees EPS of $3.50-3.70 vs. $3.50 Capital IQ Consensus Estimate; sees FY18 revs of $9.9-10.1 bln vs. $9.79 bln Capital IQ Consensus Estimate.

Xerox Corp., a once-iconic American innovator that became synonymous with office copy machines,  cedes control to Fujifilm, ending its independence

• Joint venture to eliminate 10,000 jobs globally in revamp
• U.S. company’s ubiquitious office copiers became a verb
• Activist investor Carl Icahn had pushed Xerox to explore “strategic options,” including shaking up its joint venture with Fujifilm.

Xerox and FUJIFILM (FUJIY) enter into a definitive agreement to combine Xerox and their longstanding Fuji Xerox joint venture 

• FUJIFILM Holdings and Xerox Corporation announced that they have entered into a definitive agreement to combine Xerox and their longstanding Fuji Xerox joint venture. The combined company will be a global leader in innovative print technologies and intelligent work solutions with annual revenues of $18 billion and leadership positions in key geographic regions.
  • This proposed combination provides Xerox shareholders with significant cash at closing, as well as a substantial interest in the significantly enhanced combined company.
  • Under the terms of the agreement, Xerox shareholders will receive a $2.5 billion special cash dividend, or approximately $9.80 per share, funded from the combined company's balance sheet, and own 49.9% of the combined company at closing.
  • The cash dividend represents more than 30% of Xerox's unaffected share price of $30.35 based on closing share price as of January 10, 2018.
  • Fujifilm will own 50.1% of the combined company and provide important operational support and transformational leadership.

=Long trade : Xerox Corp (XRX) +6% (1/18)

• Jan 4:  #1, 5, 8, 9, 10, 22, 37, 44, 52, 67, 95  $29.60; vol. 2.5M

• Wall Street Journal reports that the company is discussing potential deals with Japan's Fujifilm Holdings.

(Reuters) - Xerox Corp (XRX), under pressure to find new growth sources amid shrinking demand for its printer and copier business, is in talks for a deal with Japanese camera maker Fujifilm Holdings <4901.T> that could include a change in control of Xerox, the Wall Street Journal reported.

Norwalk, Connecticut-based Xerox been targeted by activist investor Carl Icahn as it struggles to reinvent its legacy business amid waning demand for office printing. Fujifilm is trying to streamline its copier business with a larger focus on document solutions services.

Xerox, which pioneered photocopiers, and Fujifilm already have a five-decade old Tokyo-based copier joint venture focusing on the Asia Pacific region including Japan and China, leaving Xerox to cover the rest of the world.

The Journal report on Wednesday cited people familiar with the matter. It also said a full takeover of Xerox is not on the table, citing one of the people. (http://on.wsj.com/2EwGDXQ)

Xerox declined to comment. Fujifilm said it would not comment on speculative reports.

Xerox has a market value of about $7.7 billion (5.70 billion pounds), while Fujifilm is valued at around $22 billion.

Xerox "desperately" needed new leadership as it was slow to launch new products and increase revenue, Icahn wrote in an open letter to shareholders in December, a day after nominating four members to the board. He is Xerox's biggest shareholder with a stake of 9.7 percent.

Xerox spun off its business process outsourcing unit in 2016 and separated into two independent, publicly traded companies.

Fujifilm shares fell 1.8 percent in Tokyo to 4,724 yen per share following the Journal report, while the broader Japanese market (.N225) slipped 0.3 percent.

The copier joint venture, Fuji Xerox, was created in 1962 and now accounts for nearly half of Fujifilm's sales and operating profit.

Fujifilm has been seeking growth outside its shrinking photographic film business, stepping up its acquisition drive in areas such as regenerative medicine.

Past deals include the 2015 purchase of Cellular Dynamics International Inc, a U.S. biotechnology firm that makes human-induced pluripotent stem (iPS) cell lines and tissue cells.

Last August, it said it aimed to spend 500 billion yen ($4.49 billion) in strategic acquisitions over three years.

($1 = 111.7000 yen)