Commercial Business Segment Makes Staples A Deep Value Investment With A High Income Stream
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Non-Correlating Stock Ideas
Staples Clearance Sale Going On Now
Chris DeMuth Jr. • 37 Comments
Chris DeMuth Jr. • 37 Comments
Tue, May 10, 7:09 PM
- In a quick response after news broke of a preliminary injunction blocking a merger between Office Depot (NASDAQ:ODP) and Staples (NASDAQ:SPLS), Office Depot says it won't appeal the ruling.
- That means the two will terminate their merger effective May 16.
- “While we are respectful of the Court’s decision to grant the FTC’s request for a preliminary injunction to prevent our merger with Staples, we are disappointed by this outcome and strongly believe that a merger would have benefited all of our customers in the long term," said Office Depot CEO Roland Smith.
- "We do not intend to appeal the Court’s decision and the two companies plan to terminate the merger agreement effective May 16, 2016."
- Smith added that after the formal deal termination, Office Depot would host an investor call May 16 to "discuss next steps in our go-forward strategy."
- After-hours trading was halted due to volatility with Office Depot down 26.3% and Staples down 10.1%.
- Updated 7:19 p.m.: Staples adds its statement. It will pay Office Depot a $250M break-up fee, and terminate its plan to sell $550M in large corporate contract business to Essendant. It will increase focus on North America midmarket customers, explore strategic alternatives for Europe, and launch a $300M cost-cutting plan.
Tue, May 10, 6:44 PM
- Office Depot (NASDAQ:ODP) has nosedived, -26.3% after hours, and Staples (NASDAQ:SPLS) down 5.4%, as a District Court judge issues a preliminary injunction blocking their $6.3B merger, according to Reuters.
- Options traders were ready for some volatility as they awaited today's ruling, on whether the court would grant a request from the FTC to hold off on the deal until an administrative judge could review it.
- While this is a preliminary injunction, any drawn-out litigation could end up killing a deal.
- Trading in the shares has been halted at those marks.
- Updated 6:55 p.m.: It doesn't look good for the buyout, since Staples CEO Ron Sargent had said in March he would likely scrap the plan if Judge Emmet Sullivan granted this preliminary injunction.
Wed, Apr. 20, 5:17 AM
- U.S. District Judge Emmet Sullivan has heard the closing arguments in the government's antitrust challenge to the planned merger of Staples (NASDAQ:SPLS) and Office Depot (NASDAQ:ODP), and must decide whether to issue a preliminary injunction to block the tie-up.
- Winning the order would likely kill the deal since companies struggle to hold mergers together during lengthy litigation.
- Sullivan also noted that the legal standards governing the case gave him a somewhat limited role, a fact that could benefit the FTC.
Tue, Mar. 29, 9:24 AM
- Staples (NASDAQ:SPLS) is on the verge of winning the legal case against the FTC over its bid to buy Office Depot (NASDAQ:ODP), sources tip New York Post.
- The judge in the case is expected to rule on an outright dismissal motion as earlier as next week.
- The Amazon defense by Staples appears to be working, especially after the Seattle company said it was coached by the government to lie. Usually court testimony in this type of case is sealed, but Judge Emmet Sullivan ordered it released.
- "The public ought to know that the government wanted Amazon to say some things that weren’t true," stated Judge Sullivan.
- SPLS +1.83% premarket to $11.10. ODP -1.75% to $7.31.
Mon, Mar. 28, 10:09 AM
- Office Depot (NASDAQ:ODP) is up 5.4% in early trading on more enthusiasm over the stance of judge weighing the FTC's argument against the ODP-Staples merger.
- Staples (NASDAQ:SPLS) is 1.9% higher to follow on last week's late rally.
- As more of the courtroom back-and-forth has been revealed, it's become more apparent that the Amazon argument may play for Office Depot and Staples.
- "The court exchange revealed pretty clear evidence that Amazon is, actually, well on its way to establishing a robust business in the space," notes RetailDive.
Wed, Mar. 23, 4:53 PM
- Dow Jones reports the judge handling the FTC's lawsuit to prevent Staples' (NASDAQ:SPLS) planned merger with Office Depot (NASDAQ:ODP) rebuked the FTC over its legal tactics, and accused the agency of pressuring Amazon to provide favorable testimony.
- Office Depot is up 5.7% after hours to $6.70. Staples is up 1.3% to $10.18.
- Prior Staples/Office Depot coverage
Thu, Mar. 17, 9:01 AM
- There's buzz in the office supply sector after the New York Post reports that Amazon (NASDAQ:AMZN) may make an offer for the corporate business unit of Office Depot (NASDAQ:ODP). The e-commerce giant is seen using the ODP corporate accounts to jump-start its new office supply business.
- A deal to offload the business would clear a path for the merger between Office Depot and Staples (NASDAQ:SPLS).
- Sources tell the Post that an activist investor with a significant stake in ODP is pushing for the transaction.
- Office Depot is up 7.79% premarket to $5.67. Staples is 1.86% higher at $9.87. AMZN is tilting lower, down 0.66% to $570.50.
Wed, Feb. 10, 7:24 AM
Sun, Jan. 3, 8:45 AM
- Despite a record-setting year for M&A, 2015 has also been full of plenty of no's from U.S. antitrust officials:
- Staples (NASDAQ:SPLS) agreed to buy its rival Office Depot (NASDAQ:ODP) in February for more than $6B, but regulators worried the tie-up would eliminate competition and sought to block the merger in December.
- Although General Electric (NYSE:GE) decided to sell its appliances business to Electrolux (OTCPK:ELUXY) for $3.3B in 2014, the Justice Department filed suit this summer, alleging the deal would result in higher kitchen appliance prices. GE walked away from the deal last month.
- Sysco (NYSE:SYY) reached its $3.5B deal for U.S. Foods in December 2013, hoping the combination would help it cut costs, however, the tie-up got shot down by the FTC in June.
- The nation's two biggest cable operators, Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC), reached a $45.2B deal to combine in February 2014, although the DOJ said the merger would make Comcast "an unavoidable gatekeeper for Internet-based services." The latter canceled the deal in April.
- Thai Union (OTC:TUFRF), owner of the Chicken of the Sea brand, struck a $1.5B deal for U.S. rival Bumble Bee Seafoods in December 2014, but the companies walked away from the agreement a year later amid antitrust objections.
Dec. 17, 2015, 7:15 PM
- In a pre-trial hearing related to Staples' (NASDAQ:SPLS) pending $6.3B deal to buy rival Office Depot (NASDAQ:ODP), an FTC lawyer argued Staples' (SPLS) current offer to divest assets in exchange for deal approval is in adequate.
- Staples, for its part, says it has made a "significant and substantial" offer. The company previously said it had offered to divest $500M in commercial contracts.
- Both Staples and Office Depot plunged last week after the FTC filed suit to block the acquisition. Canada's competition bureau has also said it will challenge the deal. Major corporate clients of the companies reportedly pressed the FTC to take action.
Dec. 7, 2015, 2:39 PM
Nov. 13, 2015, 3:37 PM
- Staples (SPLS -1%) and Office Depot (ODP +0.4%) are in talks with the FTC regarding a potential transfer of ~$600M in corporate contracts to wholesaler Essendant (ESND +0.3%) in an attempt to alleviate antitrust concerns, WSJ reports.
- The FTC has spent 10 months scrutinizing SPLS’ $6.3B acquisition of ODP amid concerns it would leave few competitive options for large corporations that buy office supplies in bulk.
- The divestiture offer by SPLS and ODP is aimed at persuading the FTC that corporate customers would continue to have options for procuring office supplies if they are not satisfied with the products, prices or services offered by the combined company.
Oct. 12, 2015, 8:17 AM
- Staples (NASDAQ:SPLS) and Office Depot (NASDAQ:ODP) announce that an agreement has been worked out with the FTC to extend the review process on the merger of the retail chains.
- The FTC says it will rule on the deal before December 8.
- The Staples-Office Depot merger has been cleared by regulators in China, Australia, and New Zealand. The two companies are still working with authorities from the European Union and Canada on some competition issues.
Sep. 25, 2015, 6:17 AM
- European Union antitrust regulators have opened an extensive investigation into Staples' (NASDAQ:SPLS) $6.3B bid for rival Office Depot (NASDAQ:ODP).
- "The transaction could eliminate an important competitor and reduce the choice of suitable suppliers in already concentrated markets, which could lead to price increases," the European Commission declared.
- It will decide by February 10 whether to approve or block the deal.
- Previously: Staples and Office Depot slide after FTC flexes muscles (Sep. 22 2015)
Sep. 8, 2015, 4:55 PM
- The FTC is intensifying its antitrust review of Staples' (NASDAQ:SPLS) planned takeover of Office Depot (NASDAQ:ODP), seeking sworn legal declarations that could be used if antitrust enforcers decide to challenge the deal, WSJ reports.
- In its review, some of the FTC’s most probing questions have focused on the chains’ business with large corporate and government customers, according to the report.
- The FTC has yet to decide whether to approve or challenge the merger, and it has until mid-October to decide whether to do so, although the deadline could be extended if the companies give the FTC more time.
Aug. 28, 2015, 5:19 PM| Aug. 28, 2015, 5:19 PM | 1 Comment