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 user 2008-06-03 at 10:59:08 am Views: 46
  • #20253{2F98ACD9-AF1C-4B19-BB12-EE1E381EDE01}&dist=msr_11
    Staples raises bid for Corporate Express to $2.6B
    AMSTERDAM, Netherlands — Staples Inc. on Tuesday raised to $2.6 billion its hostile bid for Dutch office supplies distributor Corporate Express NV.Rather than accepting two previous overtures from Staples, Corporate Express last month struck a surprise deal to buy a French competitor, Lyreco SAS, which would create an international competitor to Staples.The U.S. company has now offered 9.15 euros ($14.21) per share or 1.67 billion euros in cash for Corporate Express, up from bids of 7.25 euros and 8 euros per share.

    Corporate Express shares rose 5.5 percent to 8.82 euros ($13.70), and are now worth more than twice what they were when rumors of a Staples bid began circulating in February.In May, Staples pitched its second offer directly to shareholders, complaining that Corporate Express’s management was not willing to negotiate.”At our increased offer price, there is no question that Staples’ offer is the superior choice,” Staples CEO Ron Sargent said Tuesday.

    Amsterdam-based Corporate Express said it could not immediately comment.
    On Tuesday Framingham, Mass.-based Staples also lowered its threshold for acceptance to 51 percent from 75 percent.It said hedge fund Centaurus, investment bank New York Capital and asset management firm Halcyon, representing 23.3 percent of shares, have already agreed to its offer and will vote against the Lyreco deal at a Corporate Express shareholders meeting scheduled for June 18.

    Sargent urged other shareholders to follow suit.
    Analyst Fernand de Boer of Petercam Bank said in a note on the new bid that it was “higher than we expected Staples would go and illustrates Staples is willing to pay a strategic premium” for the Dutch company.He said Corporate Express should accept the Staples offer because cash-in-hand is superior to the debatably better long-term potential of the Lyreco merger, which may face regulatory hurdles.However, he advised Corporate Express shareholders to sell their shares now because of a significant chance the Staples deal would fail, especially if management takes “poison pill” measures to thwart Staples, such as issuing new shares to delay the process.He noted that, under Dutch bidding rules, Staples cannot raise its offer again