Office Depot’s Shareholders Rubber Stamp Staples Buyout

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Office Depot’s Shareholders Rubber Stamp Staples Buyout

Office Depot Inc. shareholders yesterday overwhelmingly voted in favor of a $6.3 billion acquisition by Framingham’s Staples Inc., paving the way for the union of the nation’s No. 2 and No. 1 office supplies chains, pending federal antitrust regulatory approvals.

Office Depot said a preliminary vote count after its shareholders meeting in its hometown of Boca Raton, Fla., pointed to 99.5 percent approval of the deal, which Staples expects to close by the end of the year.

“We’re pleased that Office Depot shareholders have overwhelmingly approved this transaction,” Staples chairman and CEO Ron Sargent said in a statement. “The combined company will allow us to provide more value to customers and more effectively compete in a rapidly evolving environment.”

The companies, which have 3,200 U.S. stores between them, are struggling to compete against online rivals such as Amazon.com and big-box stores such as Walmart and Target. As demand has dwindled for traditional office supplies such as paper, printers and toner, Staples and Office Depot have been expanding their merchandise categories and beefing up their e-commerce businesses.

Office Depot shareholders would receive $7.25 in cash and 0.2188 of a share in Staples stock for each Office Depot share under the deal terms. That’s a 
44 percent premium to Office Depot’s closing share price on Feb. 2, before the Wall Street Journal reported that the companies were in merger discussions.

The American Postal Workers Union yesterday held a press conference outside the Office Depot shareholders meeting to outline why it’s against the sale. The union has filed its opposition with the U.S. Federal Trade Commission, arguing the merger would create an office-supplies superstore monopoly and allow the combined company to charge higher prices. It previously mounted a boycott campaign against Staples for its deal to sell U.S. Postal Service products and shipping in its stores.

But analysts and both companies expect the FTC to sign off on the deal. Sargent, during an earnings call last month, said Staples had finalized its debt financing with lenders for the purchase, and the deal was “right on track” for completion by year’s end.

Staples this month received regulatory approvals for the deal from New Zealand and China. It also needs regulatory approvals from the European Union, Canada and Australia.

Office Depot’s Shareholders Rubber Stamp Staples Buyout

Office Depot Inc. shareholders yesterday overwhelmingly voted in favor of a $6.3 billion acquisition by Framingham’s Staples Inc., paving the way for the union of the nation’s No. 2 and No. 1 office supplies chains, pending federal antitrust regulatory approvals.

Office Depot said a preliminary vote count after its shareholders meeting in its hometown of Boca Raton, Fla., pointed to 99.5 percent approval of the deal, which Staples expects to close by the end of the year.

“We’re pleased that Office Depot shareholders have overwhelmingly approved this transaction,” Staples chairman and CEO Ron Sargent said in a statement. “The combined company will allow us to provide more value to customers and more effectively compete in a rapidly evolving environment.”

The companies, which have 3,200 U.S. stores between them, are struggling to compete against online rivals such as Amazon.com and big-box stores such as Walmart and Target. As demand has dwindled for traditional office supplies such as paper, printers and toner, Staples and Office Depot have been expanding their merchandise categories and beefing up their e-commerce businesses.

Office Depot shareholders would receive $7.25 in cash and 0.2188 of a share in Staples stock for each Office Depot share under the deal terms. That’s a 
44 percent premium to Office Depot’s closing share price on Feb. 2, before the Wall Street Journal reported that the companies were in merger discussions.

The American Postal Workers Union yesterday held a press conference outside the Office Depot shareholders meeting to outline why it’s against the sale. The union has filed its opposition with the U.S. Federal Trade Commission, arguing the merger would create an office-supplies superstore monopoly and allow the combined company to charge higher prices. It previously mounted a boycott campaign against Staples for its deal to sell U.S. Postal Service products and shipping in its stores.

But analysts and both companies expect the FTC to sign off on the deal. Sargent, during an earnings call last month, said Staples had finalized its debt financing with lenders for the purchase, and the deal was “right on track” for completion by year’s end.

Staples this month received regulatory approvals for the deal from New Zealand and China. It also needs regulatory approvals from the European Union, Canada and Australia.

[Author]

June 23, 2015 at 1:09 PM