Xerox shares plunges after scrapping Fuji deal

(Reuters) - Xerox Corp’s shares plunged 7.4 percent on Monday after the printer and copier maker put an end to months long proxy fight with its top two investors by scrapping a deal with Japan’s Fujifilm Holdings Corp.

Xerox had been battling activist shareholder Carl Icahn and investor Darwin Deason over the company’s plan to sell itself to Fujifilm and on Monday reached a settlement with them. Icahn and Deason own more than 15 percent of the company.

“The share price pressure imitates that people want to see that $9.80 cents special dividend which is now out of the question,” David Holt, analyst at CFRA research told Reuters.

The two companies agreed in January to a complex deal that would have merged Xerox into their Asia joint venture Fuji Xerox and given Fujifilm control. That prompted activist investors Icahn and Deason to launch a proxy fight.

Holt also said there are potential interests from other competitors as well such as HP Inc.

“When you put these two companies together, the value proposition looks attractive,”

Earlier in May, Reuters reported citing sources buyout firm Apollo Global Management LLC has approached Xerox for a possible acquisition.

Holt said there are still options on the table and it doesn’t have to be an either or situation which is good for Xerox in the long term but in the short term, Xerox does faces uncertainty.

Shares of the company down 7.4 percent at $27.82 in afternoon trade, hitting more than six-month low.

Reporting by Laharee Chatterjee in Bengaluru; Editing by Shailesh Kuber