Coughlin Stoia Geller Rudman & Robbins LLP Announces Appointment as Lead Counsel in Affiliated Computer Services, Inc. ("ACS") Merger Litigation; Secures Modifications to the No-Shop Agr

October 26, 2009 3:34 PM EDT

SAN DIEGO--(BUSINESS WIRE)-- Coughlin Stoia Geller Rudman & Robbins LLP ("Coughlin Stoia") announced today that on October 23, 2009, Coughlin Stoia was appointed lead counsel for the Texas state court actions challenging as unfair to shareholders the proposed merger between ACS (NYSE: ACS) and Xerox Corporation ("Xerox") (NYSE: XRX). Coughlin Stoia, along with Baron & Budd, is prosecuting the action on behalf of their client the City of St. Clair Shores Police and Fire Retirement System (the "Fund").

Coughlin Stoia's appointment as lead counsel was made just a few days after securing ACS's agreement to an "undertaking" that substantially modifies the existing no-shop provision in the pending merger agreement between ACS and Xerox. 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 undertaking was approved and entered by Judge Sally Montgomery of the Dallas County Court at Law, on October 20, 2009. ACS agreed to the undertaking as a result of a motion for a temporary restraining order sought by Coughlin Stoia and Baron & Budd on behalf of the Fund.

The undertaking now permits legitimate potential acquirers access to confidential information if they: (i) execute a confidentiality agreement; and (ii) submit a proposal or indication of interest at or near the consideration offered by Xerox to the Company's Class A shareholders. The undertaking also provides that any proposal can be made expressly contingent on the completion of due diligence and obtaining financing commitments, and can be withdrawn or modified at any time. In addition, the undertaking permits ACS to discuss the procedure in the undertaking, as well as any proposals, with potential acquirers.

In addition to entering the undertaking, Judge Montgomery has also directed the parties to engage in expedited discovery in anticipation of an evidentiary hearing on the Fund's motion for a temporary and/or permanent injunction. The Fund's motion, which has been set for hearing on November 23, 2009, 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.

"This is a tremendous result for the Fund and the other public shareholders of ACS," stated Randall J. Baron, a Coughlin Stoia partner working on the matter. "This temporary arrangement addresses some of the primary concerns of the Fund and allows interested bidders a 'window' to make competing bids. We anticipate the remaining concerns will be similarly addressed soon."

    Source: Coughlin Stoia Geller Rudman & Robbins LLP

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