Coughlin Stoia Geller Rudman & Robbins LLP, which represents the retirement system and has been named lead council, said ACS has agreed to an “undertaking” that substantially modifies the existing no-shop provision in the pending merger agreement between ACS and Xerox. ACS agreed to the undertaking as a result of a motion for a temporary restraining order sought by the law firm on behalf of the pension fund, according to a press release.
The motion seeks to strike all the deal protection devices in the merger agreement, including the no-shop provision, a termination fee, a matching rights provision, a “force the vote” provision, and a voting agreement with ACS CEO Darwin Deason that pledges 44% of the company’s stock to vote in favor of the Xerox bid.
The modifications to the no-shop provision permit ACS and its representatives to supply confidential ACS information to potential bidders under substantially more relaxed parameters than were set forth in the merger agreement, the press release said. The undertaking was approved by the Dallas County Court at Law on October 20, 2009.
Xerox Inc. announced in September it had agreed to buy the Dallas-based HRO outsourcer ACS in a $6.4-billion deal designed to help more strongly diversify the Xerox revenue stream away from products into services (see Xerox to Wed ACS in $6.4-billion Acquisition ).