Shares of Staples and Office Depot hit 52-week High on Merge Talks
After reports that Staples Inc. and Office Depot Inc. have been talking about merger, shares of Staples and Office Depot hit 52-week high. Currently, the retail companies are the number one and two supplies chains in the United States. According to the reports, the advance talks are results of a pressure from an activist investor.
A person familiar with the matter said that Staples and Office Depot have been discussing the deal that could create one retail chain with over $35 billion in revenue and a number of stores. The person did not reveal identity as the matter is still private. The talks have been termed `advanced' by the Wall Street Journal.
Staples, which is headquartered in Framingham, and Boca Raton-headquartered Office Depot have not commented anything on the matter. According to the reports, the companies have been facing pressure from e-commerce websites like Amazon. Both, Staples and Office Depot have more than 2,000 stores each.
A former lawyer of FTC who is currently a partner at Washington-based Hunton & Williams LLP, Amanda Wait, said, "The FTC's key question likely will be whether there is anything special about competition from office-supply superstores, such that reducing the number of competitors in that channel to one will result in higher prices to at least some consumers for at least some prices".
Office Depot had merged with OfficeMax, which was founded in 1988, in 2013 in $1.2 billion deal. According to the reports, Starboard Value LP, a New York investment advisor that holds sizeable shares in Staples and Office Depot, forced Staples to have merger discussions with Office Depot. Starboard Value LP also said the Staples to hire advisors to help evaluate and execute a deal.
Shares of Staples had climbed to about $19.4, while Office Depot shares jumped to $9.3.
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