A lawsuit is alleging that Xerox Corp (XRX.N) Chief Executive Officer Jeff Jacobson pursued a deal with Fujifilm Holdings Corp (4901.T), even after Xerox's board advised him to halt negotiations, the Wall Street Journal reported on Sunday.
Fujifilm and Xerox struck a $6.1 billion deal in January to combine the U.S. company into their existing joint venture, Fuji Xerox, to gain scale and cut costs as demand for office printing equipment declines.
The board advised Jacobson in November to halt negotiations because it was considering firing him, the newspaper reported, citing an amended suit filed in a New York state court on Sunday by Darwin Deason, a Xerox holder who opposes the deal, saying it undervalues the copier and printer company.
The company denied the assertion in a statement on Sunday.
"Xerox CEO Jeff Jacobson was fully authorized to engage in discussions with Fujifilm and Fuji Xerox on the proposed combination," Xerox Chairman Robert Keegan said in the statement.
He added that the lawsuit "distorts many of the facts regarding the proposed combination with Fuji Xerox."
Deason and activist shareholder Carl Icahn, who together hold about 15 percent of Xerox shares, are fighting the combination, which they say "disproportionately" favors Fuji. They are separately looking to shake up the Xerox board.
Deason wants to nominate directors to the Xerox board, despite missing a deadline, arguing in his suit that the current board had made a series of significant decisions and disclosures to stockholders after the nomination deadline.
A representative for Deason was not immediately available for comment outside regular business hours.