Much ado surrounds the prospective merger of Xerox Corp with Japan’s Fujifilm Holdings joint venture, Fuji Xerox. Two Xerox shareholders, Darwin Deason and Carl Icahn, have asserted that the $6.1 billion merger inexplicably favors Fuji and severely undervalues the U.S. photocopier manufacturer. Claiming a failure of duty to its shareholders, Deason is suing Xerox to block the merger.

Although a partnership between the Japanese and American giants has subsisted since 1962, with current agreements dating back as recently as 2001, Deason argues that a previously unrevealed “crown jewel” lock-up right exists wherein should Xerox sell a 30% share of their stock to another party, Fuji is granted control over Xerox’s intellectual property and manufacturing rights in the Asia-Pacific market

As stated in Deason’s complaint, “The ‘end game’ for Xerox – a sale to Fuji – was decided 17 years ago with this undisclosed ‘crown jewel’ lock-up right granted to Fuji, and shareholders had absolutely no clue.”

However, Xerox, insists that Mr. Icahn and Mr. Deason were both aware of the agreement details, going on to state, “These documents have since been publicly disclosed. For any of them to assert that these agreements were ‘shrouded in mystery’ is disingenuous, at best.” Xerox also pronounced, “The agreement is a binding legal document that cannot be simply wished away, renegotiated or dissolved because Mr. Icahn and Mr. Deason desire it so,”

Owners of a combined 15.2% share in Xerox, both Icahn and Deason have asked their fellow shareholders to free “the company from the shackles of the Fuji Xerox joint venture.” Xerox, maintaining that the merger is in the best interest of the company, countered in a recent letter to shareholders (who still have to approve the deal) that abandoning the merger would be exceedingly expensive, requiring a total supply chain rebuild that would take indeterminate time to execute.