The OEM’s board has approved its “terms of separation”, with the split expected to be completed on 31 December.
Xerox Square in Rochester, New York
Reuters reported on the announcement from Xerox’s board, with the additional news that it “expects to complete separation” by or on 31 December this year. The OEM added that “separation will occur by means of a distribution to Xerox shareholders of 100 percent of outstanding shares of Conduent”, while “fractional shares of Conduent common stock will not be distributed to Xerox shareholders”.
These fractional shares will instead “be sold in [the] open market, with net proceeds distributed pro rata in cash payments” to shareholders. Beginning on 13 December and “continuing up to distribution date, it is expected that there will be two markets in Xerox common stock”, and in turn, “for US income tax purposes”, the OEM’s shareholders “generally should not recognise gain or loss as [a] result of distribution of Conduent shares”.
On 31 December, shareholders will “receive one share of Conduent for every five shares of Xerox they hold”, the OEM concluded. Earlier this month, the OEM’s largest shareholder, who attempted to block the split, agreed a settlement in a court case. Darwin Deason had sued Xerox because of the spin-off of its document outsourcing business, as he felt that his shares would lose value after the split.
The OEM announced at the beginning of this year that it planned to split into two companies before the end of the year, with the split into Conduent and Xerox – for business process optimisation and hardware respectively, and worth $11 billion (€10.1 billion) and $7 billion (€6.4 billion) respectively. Xerox’ new CEO was revealed to be Jeff Jacobson, while Ashok Vemuri will run Conduent.