STAPLES RAISES OFFER FOR CORP-EXPRESS TO $2.6BILLION

[Anonymous]

http://www.marketwatch.com/news/story/staples-lifts-bid-corporate-express/story.aspx?guid={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.

[Author]

June 3, 2008 at 10:59 AM