By Laharee Chatterjee
In an open letter to shareholders, the billionaire investors also said they were posting a $150 million bond to preserve court-ordered preliminary injunctions - including one that blocks Xerox from holding a shareholder vote on the Fujifilm deal.
The months-long saga pits Icahn and Deason, who own about 15 percent of Xerox, against current Xerox management who have agreed to a complex $6.1 billion deal that would give Fujifilm control and values the U.S. copier and printer maker at about $28 per share.
The letter also offered a blistering attack on Xerox's current board for going back on an agreement to settle their dispute, with the investors adding they were "confident other potential buyers are waiting in the wings" and they saw the possibility of similar or better value in a standalone Xerox.
Apollo Global Management LLC has approached Xerox about a possible acquisition, people familiar with the matter have told Reuters.
Xerox declined to comment on the letter. It failed to gain a quick appeal to the decisions blocking the Fujifilm deal on Monday and the court will now hear its appeal in September, which gives Icahn and Deason time to look for other suitors.
A representative for Fujifilm was not immediately available for comment. It has previously said it is planning to appeal the court order blocking its deal with Xerox and that Xerox shareholders should decide for themselves the merits of any deal.
At $40 per share, Xerox would be valued at more than $10 billion. Last month, Icahn and Deason said Xerox could be valued at $54-$64 per share, if their suggested alternatives to the proposed merger were taken up.
Xerox first agreed to a deal with Fujifilm in late January but then sought better terms at the behest of Icahn and Deason, who gained the court order to temporarily block the deal.
A New York judge last week agreed that CEO Jeff Jacobson had been "hopelessly conflicted" in negotiating a deal that would put him in charge, since he knew the board was looking to replace him.
In a dramatic turn of events last week, Xerox agreed to fire its chief executive and part of its board to settle the litigation with Icahn and Deason.
But it then said the agreement had expired over last-minute issues that arose in negotiations with the judge overseeing the case that made the parties unable to finalize their settlement.
A source familiar with the matter said Xerox's board let the settlement expire because it came to believe it had flexibility to renegotiate a deal with Fujifilm.
Fujifilm's credit quality might suffer if it renegotiates terms that favor Xerox even as an acquisition under the current plan could worsen its key financial ratios, S&P Global Ratings said in a statement on Monday.
The combined company is likely to be less competitive than Fuji Xerox because Xerox's business would expose the new firm to the maturing North American document market, S&P said.
Xerox's shares closed little changed at $28.46 per share on Monday. Fujifilm's shares were up 1.9 percent in Tuesday afternoon trade.
(Reporting by Laharee Chatterjee in Bengaluru; Additional reporting by Makiko Yamazaki in Tokyo and Liana Baker in New York; Writing by Sayantani Ghosh; Editing by Edwina Gibbs)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)