STAPLES CORP TO BUY CORP-EXPRESS FOR $2.7B

Toner News Mobile Forums Toner News Main Forums STAPLES CORP TO BUY CORP-EXPRESS FOR $2.7B

Date: Thursday June 12, 2008 10:43:28 am
Viewing 1 post (of 1 total)
  • Author
    Posts

  • Anonymous
    Inactive

    Staples to buy Corporate Express for $2.7B
    U.S.
    office supplies company Staples has won its battle to buy Corporate
    Express after the Dutch firm agreed to a sweetened bid of 1.7 billion
    euros ($2.65 billion) to create the world’s biggest office products
    supplier.Staples said on Wednesday it was raising its all-cash offer to
    9.25 euros per share from the 9.15 euros it announced last week and
    compared to the 7.25 euros it offered in February.

    Corporate
    Express said in a statement it had ended a plan to buy privately owned
    French rival Lyreco, which was seen as an attempt to fend off
    Staples.Corporate Express shares were 1.4 percent higher at 9.20 euros
    by 1138 GMT, outperforming a 0.4 percent rise in the blue-chip index
    and almost triple the five-year low of 3.18 euros it touched in January
    before the bid battle began.”We believe this means the bid by Staples
    will be successful and that Corporate Express will disappear from the
    Dutch market,” Rabo Securities wrote in a note to clients.Analysts said
    a tie-up between a retailer and a wholesaler of office supplies would
    make strategic sense and could lead to big savings as both face a
    slowing U.S. economy, where rivals like Office Depot have warned of
    weakness.”Corporate Express is simply being realistic, they did what
    they had to do. I think it is more than fair value for Corporate
    Express,” said Petercam analyst Fernand de Boer.

    Corporate
    Express will pay a 30 million euro break-up fee to Lyreco, which said
    last week it had considered a counterbid for Corporate Express but
    market conditions were not favorable.Lyreco Chief Executive Eric
    Bigeard told Reuters his firm would now review its options on expanding
    in North America and consider acquisitions in Europe and the
    Asia-Pacific region.Staples said the firms had combined annual revenues
    of $27 billion with more than 94,000 employees in 28 countries.Savings
    are likely to be in the United States where the companies have
    overlapping operations and could come to 60 million euros in three
    years, said Petercam’s de Boer, but the companies said they did not
    expect any major job losses.Corporate Express said its boards
    unanimously recommended the offer, which expires on June 27 at 1530
    GMT. It said it would still hold a shareholders meeting on June 18, but
    there would no longer be a vote on the proposed Lyreco deal.

    INVESTOR PRESSURE
    While
    Dutch regulations meant Staples could not raise its bid again after it
    offered 9.15 euros last week, it bought about 1.1 percent of Corporate
    Express shares at 9.25 euros each in an off-market transaction, meaning
    it has to pay that for the rest.It said it now owns 13.4 percent of the
    firm’s ordinary shares and holders of about 23.3 percent of the Dutch
    company have already committed to accept Staples’ offer, which it will
    declare unconditional if it gets 51 percent of shares.Staples said the
    deal gave Corporate Express an enterprise value of about 3.1 billion
    euros, including about 1.7 billion euros in equity with 182.9 million
    ordinary shares outstanding.Later in the day Staples said it was
    increasing its offer for all Corporate Express’ convertible bonds to
    1,346.71 euros per bond from the 1,332.15 euros offered
    previously.Corporate Express Chief Executive Peter Ventress will take a
    new position as president of Staples International to oversee business
    outside of North America and play a key role in managing the
    integration of the two firms.

    Staples said it expected
    settlement of the offer in July and that it had sufficient funding for
    the deal.The Staples deal comes after activist investors put pressure
    on Corporate Express due to poor performance in the United States,
    where it generates around 50 percent of sales.It is just the latest in
    a slew of Dutch companies to be bought by a foreign rival, including
    bank ABN AMRO, electrical goods supplier Hagemeyer and food company
    Numico. Few government barriers to takeovers and a liberal Dutch
    corporate governance code have made them desirable targets.Corporate
    Express trades at 16 times estimated 2008 earnings, compared with
    Staples at 15.5 times and Office Depot at 12.3 times, according to
    Reuters data.Lehman Brothers Holdings Inc is providing Staples with
    financial advice; Clifford Chance LLP and WilmerHale LLP are providing
    legal and tax advice; and Weil Gotshal & Manges LLP is providing
    antitrust advice.

    http://news.yahoo.com/s/nm/20080611/bs_nm/corporateexpress_dc;_ylt=At07CHu2.q2qKwzLyrtAVrSyBhIF

Viewing 1 post (of 1 total)
  • You must be logged in to reply to this topic.