Perhaps the third time will be the charm. Staples is making another bid to acquire its rival Office Depot, this time with a bid of $2.1 billion — one-third of the $6.3 billion offered in the original 2015 merger agreement. That deal was shut down in 2016 due to antitrust concerns. The two companies also had attempted a merger in 1997 that was stopped by the Federal Trade Commission (FTC).
In a release, Staples said it sent a letter to the Board of Directors of Office Depot (ODP) outlining the proposal to acquire the chain for $40 per share in cash — a $2.1 billion transaction. This offer represents a 61% premium over ODP’s average closing price during the immediately preceding 90 trading days. “Staples believes that its all-cash transaction is a compelling value proposition for ODP’s stockholders that offers a high degree of certainty and is superior to the intrinsic, standalone value of ODP,” the release said.
To avoid another government antitrust action, “Staples is prepared to take all necessary measures to divest ODP’s (Office Depot’s) B2B Business to a FTC-approved and qualified buyer concurrently with the closing of the overall transaction, thereby satisfying any reasonably anticipated regulatory objections.”
The regulatory process could take as long as six months, the company said. Staples plans to commence a public, all-cash tender offer for 100% of ODP’s outstanding shares of common stock in March 2021 in the event it cannot reach a negotiated agreement with ODP.