Office Depot turned down an unsolicited takeover bid for Staples, but indicated it is open to an alternative deal, the latest twist on a multi-year dance among office supplies retailers.
Staples on Jan. 11 proposed buying the parent office of Office Depot, ODP Corp., for more than $ 2 billion or $ 40 per share. Staples said it would pursue a public bidding bid for ODP shares in March if companies fail to reach an agreement on a deal.
ODP has concluded that the sale of its retail and consumer e-commerce operations to Staples or a joint venture is preferable to a full acquisition, according to a letter sent by the ODP chairman to an official of the private equity firm he controls. Staples. It was said in the letter, seen by The Wall Street Journal, that such an agreement would allow for the same cost savings as a company-wide sale, but would be less likely to attract prolonged regulatory scrutiny.
Staples ’recent bid is the third time he’s tried to acquire his main brick rival. Previous efforts, including a $ 6.3 billion proposal five years ago, were blocked by antitrust authorities. Sycamore Partners withdrew Staples in 2017 and is now controlled by a subsidiary of the buying firm called USR Parent Inc.
As a sign that investors anticipate some sort of deal, ODP shares have risen 24% since USR unveiled its offer, closing Friday at $ 45.86. A link to the retail operations of office suppliers could generate significant cost savings if the combined company reduces its footprint by closing overlapping stores.