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Rise and Fall

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2015年2月10日

Staples to buy Office Depot for $6.3bn - FT.com

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Last updated: February 4, 2015 7:39 pm

Staples to buy Office Depot for $6.3bn
James Fontanella-Khan and Stephen Foley in New York
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Staples agreed to acquire Office Depot on Wednesday in a $6.3bn transaction that will create the largest office stationery company in the US, marking the latest victory for activist investor Starboard Value. The deal establishes Starboard and its founder Jeff Smith as one of the most prolific and successful activists, in a sector of the hedge fund industry that has traditionally been dominated by higher-profile names such as Carl Icahn and Bill Ackman.

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Office Depot shareholders will receive $7.25 in cash and 0.2188 Staples shares. The transaction values Office Depot at $11 a share, a 44 per cent premium on Monday’s closing price, before it emerged that the two were in advanced merger talks. However, the deal faces intense regulatory scrutiny according to lawyers and dealmakers who worked on similar transactions, as it comes just under two years after Office Depot merged with smaller rival OfficeMax.

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A person familiar with the matter said that Staples might be forced to shed part of its commercial operation to get the deal approved. Staples introduced a $250m break-up fee if the deal does not go through, which is in line with similar deals.

The merger announcement comes the week after Yahoo decided to spin off its $40bn stake in Alibaba and the packaging companies MeadWestvaco and RockTenn agreed a $16bn packaging sector merger, both plans that Starboard had been agitating for. Last year, Starboard showed its muscle by ousting the board of Darden Restaurants, owner of the Olive Garden chain. “Management teams are much more receptive than they used to be — Darden may be the exception,” Mr Smith said at the Salt hedge fund conference last year. “Our track record is, in general, better than theirs. We are choosing companies that haven’t been performing well.” Starboard owns about 6 per cent of Staples and 10 per cent of Office Depot. The activist and its supporters argued that the Federal Trade Commission has become more open to allowing consolidation among office supply retailers, as they face greater competition from large merchants such as Walmart and Target as well as online retailers like Amazon. Staples’s acquisition will give it a market-leading position in the business of selling pens, paper and pins to consumers and offices, argued Ron Sargent, Staples chief executive. The combined group will have about 4,000 stores and expected annual sales of about $39bn. Staples’s earlier attempt in the late 1990s to acquire Office Depot was blocked by the FTC despite the company offering concessions including selling 63 stores to the group’s smaller rival. “There is no guarantee the FTC will clear Staples-Office Depot just because they cleared Office DepotOfficeMax,” said Amanda Wait, an antitrust lawyer with Hunton & Williams. “The deal parties and thirdparty corporate customers should prepare for a long investigation focusing on bidding for corporate customers.” Staples said it had obtained financing commitments from Barclays and BofA Merrill Lynch for a $3bn credit facility, and a $2.75bn six-year term loan. Staples was advised by Barclays with legal assistance from Wilmer Cutler Pickering Hale and Dorr and Weil, Gotshal & Manges. Office Depot was advised by Peter J. Solomon and received legal counsel from Simpson Thacher & Bartlett.
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United States of America, Mergers & Acquisitions, Barclays PLC

Lex: Staples/Office Depot

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Staples to buy Office Depot for $6.3bn - FT.com

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