Office Depot has rejected an unsolicited takeover bid from Staples, but said it is open to an alternative bid, the latest twist in a years-long dance between office supply retailers.
On Jan. 11, Staples offered to buy Father Office Depot, ODP Corp., for more than $ 2 billion or $ 40 a share. Staples said a public tender for ODP shares will follow in March if companies fail to reach an agreement on a deal.
ODP concluded that a sale of its retail and consumer e-commerce operations to Staples or a joint venture is preferable to a full takeover, according to a letter sent by the ODP president to an official of the private equity firm that controls Staples. The letter, seen by The Wall Street Journal, stated that such an agreement would allow the same cost savings as the sale of a complete undertaking, but would be less likely to attract prolonged regulatory control.
Staples’ recent bid marks the third time he has tried to buy his main brick rival. Previous efforts, including a $ 6.3 billion proposal five years ago, have been blocked by antitrust authorities. Staples was taken over by Sycamore Partners in 2017 and is now controlled by a subsidiary of the purchasing company called USR Parent Inc.
As a sign that investors anticipate some kind of transaction, ODP shares have increased 24% since USR revealed its offer, closing on Friday at 45.86 USD. A linking of retail suppliers’ office operations could generate significant cost savings if the combined company reduces its footprint by closing its overlapping stores.