Control of listed stationery group, Corporate Express is set to change hands after its Dutch parent, Corporate Express, agreed to be acquired by US giant, Staples.
Staples boosted its bid of 1.7 billion euro ($US2.65 billion) and won control after several lower priced attempts.
Staples will now offer an all-cash offer of 9.25 euros per share, up from a previously revised bid of 9.15 euros announced last week and the 7.25 euros it first offered in February. The new price is equal to around $US14.36, which is around $A15.20. The whole company, including debt, is valued at $US4.8 billion, or around $A5.1 billion.
"The 9.25 euros cash per ordinary share offer adequately values Corporate Express and represents a significant improvement over the initial proposal of 7.25 euros and offer of 8.00 euros per ordinary share respectively," Corporate Express said in a statement.
It said it has ended a plan to merge with privately-owned French rival Lyreco, seen as an attempt to fend off Staples.
In a statement released late yesterday on the ASX, Corporate Express said "both the Executive Board and the Supervisory Board of Corporate Express unanimously recommend shareholders to accept the increased offer for its Ordinary Shares from Staples for reasons that will be set out in more detail in a position statement to be published by 12 June at the latest."
CXP said the 9.25 euro cash offer per share "adequately values Corporate Express and represents a significant improvement over the initial proposal of 7.25 and offer of 8.00 per Ordinary Share respectively;
"Corporate Express and Staples have agreed on a number of key issues with regard to strategy, employees and integration process; the combined group will offer attractive career opportunities for Corporate Express employees in the enlarged group; and customers will benefit from an expanded and improved service."
CXP closed at $5.90 in Australia, a rise of 10 cents yesterday. The news of the higher offer was released after trading had Finished in Australia. There was no mention yesterday of whether Staples would move to mop up the 42% of the company CXP’s Dutch parent doesn’t own.
It’s doubtful that it will as that would cost a further $400 million plus (or around 240 million euros) based on a market cap of around $990 million.
In the statement issued in the US, Holland and Australia the two companies said the merger "will create the world’s premier provider of office products to businesses of all sizes. The combination will have strong positions globally, serving customers in 28 countries.
"The companies’ collective businesses, as of the end of each company’s 2007 fiscal year, had annual revenues of circa € 18 billion with more than 94,000 employees.
“Prior to reaching its decision, Corporate Express carefully listened to the views expressed by shareholders.
“In reaching a recommended offer, the Boards also expect there to be an orderly integration of Corporate Express – to the benefit of both employees and customers.
CXP CEO, Peter Ventress will become President of Staples International, to oversee Staples’ business outside of the United States and Canada and will play a key part in managing the integration of the two businesses going forward. He will report to Ron Sargent, Staples’ Chairman and CEO.
The European contract business headquarters will be maintained in Amsterdam; an integration committee will be formed to oversee the integration process; which will consist of senior management from Corporate Express and Staples and Staples said it had "no plans to make material reductions to the overall workforce."
So will Staples sell its Australian stake? Harvey Norman is expanding into the segment to take on Officeworks; it would make a good, fast way to gain scale in what’s a competitive sector?
