Xerox CEO Leaves Then Immediately Comes Back

After a fight with activist shareholders cooled, Xerox Corp. (NYSE: XRX) CEO Jeff Jacobson returned to the company just days before he was told to leave. The entire board, which was also on its way out, will stay as well. The reversal is based on the expiration of an agreement with shareholders Carl Icahn and Darwin Deason, The two objected to a takeover of Xerox by Japan’s Fujifilm Holdings.

Xerox apologized to shareholders for the disruptions.

The company disclosed in a press release:

Xerox today announced that the settlement agreement it had reached with Carl Icahn and Darwin Deason on May 1, 2018 has expired in accordance with its terms. As previously stated, the agreement would have become effective upon execution of stipulations discontinuing the Deason litigation with respect to the Xerox defendants. In the absence of such stipulations, the agreement expired at 8:00 p.m. ET on May 3, 2018.

As a result, the current Board of Directors and management team will remain in place.

Xerox and its Board of Directors recognize the uncertainty caused by the developments of the past several days among the company’s investors and other stakeholders.

Although the agreement has expired, Icahn and Deason said the matter is not over. In a letter to shareholders they wrote:

The Xerox board recklessly refused to follow through with the leadership and governance changes we agreed to, demanding unprecedented additional approvals for their own personal self-interest. We will continue our fight to rescue and revitalize Xerox.

The letter was first published by Bloomberg.

The ongoing battle means Jacobson could lose his job again.

Icahn and Deason do not think the deal is rich enough for Xerox shareholders, including themselves. Fujifilm has set up a subsidiary to hold 50.1% of the new entity, which would own all of Xerox and certain Fujifilm assets. Xerox shareholders would get a special dividend of $9.80 if Fujifilm’s deal goes through.

The board should not unpack its bags.