Staples has again offered rival Office Depot its $2.1 billion takeover, five years after the US government scrapped their previous merger.
Under the current deal, they will pay $40 per share of ODP stock, which is the parent company of Office Depot, which is 60% higher than its average closing price over the past 90 days. Staples described the all-cash deal as a “disguised proposition” and “a standalone, over-the-counter proposition” for Office Depot, whose shares are up 10 percent in premarket trading.
Staples, which went private in 2017 after selling itself to Sycamore Partners, said it was ready to take all necessary actions to get the deal to be approved by the Federal Trade Commission, which said in 2015 that the merger of the two companies would give them a significant portion of the office supply retail market and that the deal would violate antitrust law.
In order to avoid antitrust scrutiny, Staples proposed selling her IT department, CompuCom, or its business division.
This decision may increase the value of its bid to purchase Office Depot, and the regulatory procedures for the transaction may take about six months, according to the company’s estimates, and Staples calls on the ODP Board of Directors to direct management to cooperate with the regulatory authorities as soon as possible.
Looking at its old deal, Staples’ bid on Monday is about a third of its $6.3 billion 2015 bid, and is the third attempt at a merger of the two companies, given that they tried in 1997. Staples and Office Depot are currently facing stiff competition from retail stores that are not traditional suppliers of office supplies such as Amazon and Walmart.