The Dutch office supplies distributor Corporate Express accepted a sweetened buyout offer today of about $2.7 billion from U.S. office supplies retailer Staples...
AMSTERDAM, Netherlands — The Dutch office supplies distributor Corporate Express accepted a sweetened buyout offer today of about $2.7 billion from U.S. office supplies retailer Staples.
Staples, which doggedly pursued the deal to broaden its reach in Europe, raised its offer three times, the last two after Corporate Express made a bid for Lyreco of France in a defensive maneuver. Corporate Express is calling off that deal.
The board of Corporate Express said it decided to endorse the Staples deal and recommend it to shareholders after the U.S. company raised its offer to 9.25 euros ($14.36) a share, up from the previous bid of 9.15 euros.
“I think the paper clip wars are over, and it’s a win for both sides,” Staples Chairman and Chief Executive Ron Sargent said in an interview.
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Sargent said the final step up in price “was a small price to pay for the full support of Corporate Express’ management.”
Including Corporate Express debt being assumed, Staples said the transaction is valued at about 3.1 billion euros ($4.8 billion).
Staples is the world’s largest seller of office supplies on the basis of its strength as a retailer in the U.S. market. Corporate Express is the largest distributor, selling only to companies.
“This acquisition establishes Staples as the world’s premier provider of office products to businesses of all sizes,” Staples said.
Corporate Express had 2007 sales of 5.6 billion euros ($8.8 billion), compared with $19.4 billion for Staples, which is based in Framingham, Mass.
Corporate Express said it had won an agreement with Staples “that they have no plans to make material reductions to the overall work force.”
Sargent said Staples faces no specific prohibition limiting job cuts to a certain number in a deal he said would help both companies become more efficient without large cuts. The companies have little operational overlap where job cuts could be made, other than in contract office-supplies sales in the U.S., Sargent said.
“We’re not handcuffed at all,” he said. “We’re saying we will work together to achieve synergies …. We’re going to look at every part of our businesses, and how do we reduce costs.”
Until the deal closes, Sargent said he could not offer predictions on how much in savings the companies expect to realize by pairing up, or when the deal might add to Staples’ earnings.
Amsterdam-based Corporate Express said it has broken off its agreement to buy Lyreco, which is entitled to a breakup fee of 30 million euros ($46 million) as a result.
The Staples deal will be discussed at a Corporate Express shareholders meeting on June 18.
Staples shares rose $1.03, or 4.4 percent, to $24.18 in late morning trading in New York. American Depositary Shares of Corporate Express rose 27 cents, or 1.9 percent, to $14.27.
The deal was a win for Corporate Express shareholders. When rumors of Staples’ interest began circulating in early February, Corporate Express’ stock had been trading at less than half its current price.
Staples’ initial offer of 7.25 euros a share was later raised to 8 euros a share, and last month Corporate Express agreed to combine with Lyreco in what was seen as a move to either evade Staples’ embrace or force a higher bid from the U.S. company.
On June 3, Staples raised its bid to 9.15 euros, and two days later Corporate Express said they had entered talks.
The offer closes on June 27, and Staples said it expected the deal to close in July.
Corporate Express Chief Executive Peter Ventress will head Staples’ international operations, which will be headquartered in Amsterdam.
Associated Press reporter Mark Jewell contributed to this story from Boston.