(MENAFN - AFP)One of Xerox's biggest shareholders filed suit Tuesday to challenge the US photocopier and printer maker's planned takeover by Japanese technology firm Fujifilm.
The suit was lodged by Darwin Deason who -- along with Carl Icahn -- controls 15.2 percent of Xerox's shares, according to a document presented to the US Securities and Exchange Commission.
Deason is suing Xerox and Fujifilm in a New York state court, alleging fraud.
Under the planned deal, Xerox is to be absorbed by an existing joint venture known as Fuji Xerox and will fall under the control of Fujifilm, which until now held a 75 percent stake in the joint venture.
After the transaction is completed, Fujifilm would hold 50.1 percent of Fuji Xerox, compared with 49.9 percent for the current Xerox shareholders, who would also receive a special cash dividend of $2.5 billion.
The Xerox board pushed for this deal even though, Deason said, it is not in the interest of the company or its shareholders.
The 77-year-old billionaire also said Xerox had made a secret deal with Fujifilm in 2001, alleging that under the agreement, if Xerox were taken over by any investor other than Fujifilm, the latter could leave the joint venture Fuji Xerox.
Deason argues that this clause prevented the Xerox board from seeking another buyer and this in turn harmed the company's shareholders.
On Monday, Deason and Icahn published an open letter in which they said the deal greatly undervalues Xerox and favors Fujifilm disproportionately.
They called on Xerox shareholders to vote against the merger with Fuji Xerox.