Staples proposed a
7.25 euros per share cash offer for Corporate Express.AMSTERDAM (Reuters) - U.S. office goods supplier Staples proposed a
7.25 euros per share cash offer for Dutch peer Corporate Express
on Tuesday, valuing it at around 2.5 billion euros ($3.7 billion) and sending its shares soaring.
Analysts said the deal would bring cost synergies and boost Staples'
market share in the United States where Corporate Express generates
around 50 percent of its revenue.
Ending months of speculation about a possible bid, Staples said its
offer represented a premium of around 67 percent to Corporate Express'
closing price of February 4, and it urged the Dutch firm's management
to co-operate.
"From a strategic point of view they are a good fit but it
significantly undervalues the company. They will probably have to raise
to about 8 euros," said Fortis analyst Maarten Bakker.
Corporate Express, one of the world's largest office products
wholesalers, has been under pressure from hedge funds to put itself up
for sale after losses in the United States, its key market. It was not
immediately available to comment.
Its shares were up 41 percent at 7.65 euros at 9:10 a.m. ET.
Corporate Express, which installed new management towards the end of
last year, said earlier this month it had managed to reverse falling
U.S. sales in the last quarter of 2007 and reiterated it wanted to
continue as an independent firm.
"Staples has high regard for the Corporate Express management team,
and believes together our combined companies will create significant
opportunities for all stakeholders," said Ron Sargent, Staples chairman
and chief executive.
In a letter to Corporate Express, Staples wrote: "Over the last
several months, we have made repeated attempts to engage in discussions
with you concerning a business combination, and we have been
disappointed that you have not been willing to do so.
"We believe that a business combination with Staples at this time
would result in superior benefits for Corporate Express' stakeholders."
Corporate Express has traded at a discount to Staples, at 10 times
projected 2008 earnings versus a price-earnings ratio of 15 for Staples
and 10 for number two Office Depot Inc.
(Reporting by Alexandra Hudson; Editing by David Cowell)
