Office Depot-owner ODP turns down latest offer from Staples for some assets

Office Depot-owner ODP turns down latest offer from Staples for some assets

(March 15, 2021) - ODP Corp said on Monday it had rejected a proposal from Staples to acquire some assets of the Office Depot and OfficeMax owner, adding that the offer lacked basic deal terms including a purchase price.

The proposal from office supplies retailer Staples, owned by buyout firm Sycamore Partners, did not include a valuation of the assets that it sought to acquire or any commitment by Staples to complete the deal, according to ODP.

In January, ODP rejected bigger rival Staples’ more than $2 billion takeover offer and instead proposed merging only the consumer-focused retail operations of ODP and Staples to avoid regulatory scrutiny.

Staples’ earlier attempts at combining with ODP, in 1996 and 2016, failed due to regulatory concerns.

ODP said on Monday the offer made last week was for some assets, including its retail and consumer-facing online operations, as well as certain business-to-business assets.

The Office Depot parent, which has been doubling down on its business-to-business segment, again urged Sycamore to pursue combining the retail businesses of ODP and Staples.

ODP’s business solutions unit sells office supply products, breakroom supplies and personal protective equipment to businesses in the United States and Canada. It accounted for about half of the company’s fiscal 2020 sales.

“The board ... has determined that ODP, in the best interest of its shareholders, cannot agree to such a proposal,” ODP Chairman Joseph Vassalluzzo said in a letter to USR Parent Inc, the Sycamore-affiliated owner of Staples.

Staples did not immediately respond to a request for comment.

ODP’s shares, up about 37% this year, were down 1.2% at $39.56. - (Reuters)