Bizarre twist at Xerox sees ousted CEO and directors remain in place

CEO and multiple directors were set to depart following agreement with activist investors, but this deal has 'expired' before being completed

Xerox CEO Jason Jacobson and six board members are to remain at the vendor, despite a deal being reached with activist investors that would have seen them depart.

Following a power struggle between the Xerox board and two activist investors (Carl Icahn and Darwin Deason), an agreement was announced earlier this week that would see Jacobson and a host of board members ousted, to be replaced by Icahn favourites.

But in an unexpected twist, Xerox released a statement overnight claiming that this agreement has now expired, meaning all leadership will remain in place.

In a scolding joint statement, Icahn and Deason attacked the Xerox board for displaying "brazen self-interest".

The statement said: "At 8:00 pm ET (Eastern Time in the US) on Thursday night, the settlement agreement we entered into with Xerox and a unanimous Xerox Board earlier this week expired without the Xerox Board permitting the agreement to take effect, once again intentionally violating their fiduciary duties to Xerox shareholders by pursuing their own brazen self-interest.

"This inexplicable turn of events occurred for one reason only: the Xerox Board recklessly refused to follow through with the leadership and governance changes we agreed to, demanding unprecedented additional approvals for their own personal self-interest.

"Over the next few months, we intend to see that "massively conflicted" Jeff Jacobson and old guard directors like Bob Keegan, Ann Reese and Chuck Prince - who have already done so much damage to the company, and are continuing to do more damage with these actions - are held fully and personally liable for their misconduct."

The dispute was largely a result of Icahn and Deason opposing the proposed merger of Xerox and Fujifilm.

The merger plans looked to be in ruins after the agreement between the investors and the board was reached earlier this week, but is perhaps more likely now that Jacobson appears to be remaining at the helm.