Icahn and Deason are the two largest individual shareholders in Xerox, and have a combined stake of more than 15% in the company. Yesterday they broke a 12-day silence since the takeover was announced at the end of last month, and filed a 2,000 word open letter to Xerox shareholders that criticises many aspects of the deal, which would create a new $18bn (£12.96bn) turnover industry giant. 

The letter takes aim at Xerox management, and of Fujifilm's management of joint venture Fuji Xerox, where a huge ¥40bn (circa £267m) accounting scandal was unearthed last year at its New Zealand and Australia operations.  

The duo argue that rather than agreeing to the takeover, Xerox should use the scandal as a means of extricating itself from the unfavourable terms of the Fuji Xerox joint venture, which they described as "an albatross".  

Of the overall takeover deal, which would see Xerox shareholders receive a $2.5bn cash dividend and a 49% stake in the enlarged Fuji Xerox, the letter stated: "The transaction has a tortured, convoluted structure, but it was best summarised by Shigetaka Komori, Fuji’s chairman and CEO, when he boasted to the Nikkei Asian Review that the 'scheme will allow us to take control of Xerox without spending a penny.' 

"It really is a remarkable achievement by Fuji. Without putting up any cash, they will acquire majority control and ownership of a venerable American icon. In exchange, we – the existing Xerox shareholders – will receive an additional, indirect 25% interest in a Fuji subsidiary that just last year disclosed a $360 million accounting scandal caused by a 'culture of concealment' and Fuji's failure to have adequate management systems, and a one-time special dividend financed with our own assets." 

The letter concludes: "We urge you – our fellow shareholders – do not let Fuji steal this company from us. There is still tremendous opportunity for us to realise value on our own if we bring in the right leadership. Vote against the Fuji scheme to send a clear message that we will not be fooled into giving up control of our company for $9.80 in cash." 

In response, Fujifilm issued the following statement to PrintWeek: "The combination represents compelling strategic and financial value for Xerox shareholders. The combined company will create a strong business foundation under a globally unified management strategy and provide new value by leveraging Fujifilm's technological resources. Fujifilm is confident that the combination will maximize the value of Xerox and Fuji Xerox, providing further benefits to Xerox shareholders, customers and other stakeholders. " 

Xerox also issued a rebuttal, describing the Fujifilm deal as "the best path" for the business. It said: "A comprehensive review of strategic and financial alternatives conducted over many months by the independent members of the Xerox board of directors, in consultation with independent financial and legal advisors, considered several other options in detail and concluded that the combination with Fuji Xerox is the best path to create value for Xerox shareholders.  

"The transaction provides shareholders with the opportunity to benefit from ownership in a combined company that has enhanced growth prospects and a stronger financial profile to support future value creation, as well as an immediate substantial dividend payment. Xerox remains committed to ensuring the actions it is taking prioritise the best interests of its shareholders, customers, employees and various other stakeholders around the world.” 

The full text of the open letter to shareholders from Icahn and Deason can be found here.  

Xerox's top five shareholders are: Icahn Associates; The Vanguard Group, Blackrock, State Street Global Advisors, and Deason. 

Fujifilm's proposed takeover of Xerox requires a simple majority of Xerox shareholders to approve it, and is also subject to regulatory approval. If given the green light, the deal is expected to complete in the second half of this year. 

Xerox shares hit a 52-week high of $37.42 after the deal was announced, but have since slipped back and closed at $29.95 yesterday.