Office Depot, OfficeMax Said to Discuss Merger Under Pressure

[Eugene]

Source: Bloomberg

Office Depot, OfficeMax Said to Discuss Merger Under Pressure

By David Welch & Matt Townsend - Feb 18, 2013 4:58 PM ET

Office Depot Inc. and OfficeMax Inc. are discussing a merger with a deal possible this week, said a person familiar with the matter.

The companies have been discussing a potential stock swap that would create a single office-supply retailer to compete with Staples Inc. Office Depot, the second-largest office-supplies retailer in the U.S., has been exploring options since September, when activist fund Starboard Value LP became its largest shareholder.

A merger would create a company with almost $18 billion in revenue, compared with $25 billion in revenue last year for Staples. A deal also could be a victory for Starboard, which has been pushing Office Depot to create value for shareholders.

Starboard Chief Executive Officer Jeffrey Smith wrote a letter to Office Depot CEO Neil Austrian on Sept. 17 arguing that the retailer’s “poor operating performance” has hurt the shares. Smith, whose firm owns 13 percent of the chain, said Office Depot should move to smaller stores and reduce the number of items it sells. The chain also should cut general expenses and “significantly” lower advertising costs, Smith said.

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Read more: http://www.bloomberg.com/news/2013-02-18/office-depot-officemax-said-to-discuss-merger-under-pressure.html

[Warpy]

1. A merger might also be pretty painless

because the store setups are so close that I have to ask "which one is this?" when I get to the check stand to write a check.

Indie places are long gone. It's been McOffice Supples around here for years.

Chains need to get to a saturation point with people frustrated by not being able to find some of what they need at bricks and mortar stores before indie stores have a chance to start up again to fill the empty spaces in McStore inventory.

Hardware stores are starting to reappear in this town after a nearly 20 year drought.

[WCGreen]

4. The best hardware store just closed up because the grand kids

didn't want to stay in the business.

I guess someone bought the store and then joined the True Value co-op.

Makes sense because there is a huge True Value Distribution Center about two miles away.

I like Home Depot for big stuff because we can buy their gift cards from a grocery store, giant eagle, that turn into gas discount.

I'm glad the store remains because they do stuff like fix windows and screens and carry bulk hardware so you can buy 20 screws instead of a whole box.

[Sherman A1]

2. Interesting

one wonders how many jobs this will cost?

[Scuba]

3. Officopoly, no unions, no benefits, low wages, no competition, lousy selection and high prices.

What's not to love?