U.S. Judge blocks Fujifilm, Xerox merger temporarily

(Reuters) – Fujifilm Holdings Corp’s (4901.T) merger with U.S. firm Xerox Corp (XRX.N) was temporarily blocked on Friday following a court ruling, handing its activist investors a win after they sued to stop the deal.

A man is silhouetted in front of Fujifilm Holdings’ logo ahead of its news conference in Tokyo, Japan January 31, 2018. REUTERS/Kim Kyung-Hoon

The ruling reopens nominations to Xerox’s board on Friday after investor Darwin Deason filed a lawsuit against the company last month opposing the deal and asking to add his own nominees to the board.

FILE PHOTO: The logo of Xerox company is seen on a building in Minsk, Belarus, March 21, 2016. REUTERS/Vasily Fedosenko/File Photo

The preliminary injunction comes a day after the companies reopened deal talks.

Fujifilm and Xerox reopened talks on their $6.1-billion merger and are discussing a higher price after Xerox, under pressure from top investors, asked to renegotiate the terms, Reuters had reported earlier.

The proposed merger is opposed by two of Xerox’s top shareholders, Carl Icahn and Deason, who have said the agreement dramatically undervalues Xerox.

In February, Deason asked a court to block the merger with Fujifilm Holdings, arguing the U.S. photocopier maker’s board had failed shareholders by approving a deal that undervalues the company.

Icahn and Deason, who own a combined 15 percent of the U.S. printer and copier maker, have called the deal structure “tortured” and “convoluted.”

Reporting by Liana Baker in New York and Abinaya Vijayaraghavan in Bengaluru; Editing by Sandra Maler

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