Staples offers to purchase Office Depot for $ 2.1 billion

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The $ 40 per share offer price for Office Depot’s parent company, ODP Corp., is a premium of approximately 60% over the average closing price of the past 90 trading days. The all-cash transaction is, according to Staples, a ‘compelling value proposition’ and ‘superior to the intrinsic, independent value’ of Office Depot.

Office Depot (ODP) stocks were up about 10% in premarket trading. Staples went private in 2017 and sold itself to Sycamore Partners, a company focused on keeping ailing retailers afloat.

Staples said it is “willing to take any necessary steps” to get the merger approved by the Federal Trade Commission, which said in 2015 that the combination would give the combined companies too much of the retail office supplies market and the antitrust law. would violate.

To avoid antitrust investigations, Staples suggested selling its IT management company CompuCom or its business-to-business unit. That could cause Staples to increase its suggested price, he said. The regulatory process could take about six months, the company estimates, and Staples is urging ODP’s board of directors to “instruct management to cooperate with regulatory authorities as soon as possible.”

Office Depot did not immediately return CNN Business’s request for comment. Monday’s proposal is about one-third of the purchase price of the original 2015 purchase agreement of $ 6.3 billion.
This is the third time in approximately 25 years that the companies have attempted to merge, including once in 1997. Staples and Office Depot have faced fierce competition from stores that are not traditional office suppliers like Amazon (AMZN) and Walmart (WMT).

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