Xerox Rejects Proposed Merger Deal With R.R. Donnelley
15 Juillet 2016 - 4:20AM
Dow Jones News
Xerox Corp. privately rejected a bid to merge its document
business with R.R. Donnelley & Sons Co., according to people
familiar with the matter.
Xerox in January announced plans to break into two businesses,
splitting its business-outsourcing operations from its legacy
printer and copier division. As is often the case with such
breakups, Xerox has drawn some interest in potential deals since
then, people familiar with the matter said.
R.R. Donnelley, which is also in the process of breaking up,
expressed interest in putting its operations together with Xerox's
remaining copier business, the people said.
The R.R. Donnelley proposal called for its executives to take
control, and for several hundred million dollars in new cost cuts,
one person added.
The Xerox board reviewed the proposal with its advisers before
telling R.R. Donnelley Thursday it wasn't interested—believing its
own plan is less risky, the people said.
Xerox stock closed Thursday at $9.65, up 4.6% since it announced
plans to split. R.R. Donnelley, which rose on reports the two were
in talks earlier this week, closed at $18.62 Thursday, up 6.3%
since announcing its own separation in August.
Xerox, based in Norwalk, Conn., has been plowing ahead with its
plans for separating the businesses by the end of the year, naming
new chief executives for both in June. Insider Jeff Jacobson is
being promoted to the leader of the slower-growing documents
business, which will keep the Xerox name, and Ashok Vemuri was
hired to be the CEO of the services business, to be named Conduent
Inc. Current Chief Executive Ursula Burns will be chairman on the
documents company.
Meanwhile, last month the company agreed to let activist
investor Carl Icahn place a director on the board immediately, who
would continue on the board of the split-off documents business.
That is in addition to three seats Mr. Icahn has already been
promised at the business-services company when that is spun out.
Mr. Icahn owns a 9.8% stake, making him the largest Xerox
holder.
Chicago-based R.R. Donnelley has said it would separate into a
financial-communications and data-services business; a publishing
and print-services business; and a communications-management
company.
Dana Mattioli and Andrew FitzGerald contributed to this
article.
Write to David Benoit at david.benoit@wsj.com and Dana Cimilluca
at dana.cimilluca@wsj.com
(END) Dow Jones Newswires
July 14, 2016 22:05 ET (02:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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