NEW YORK/AMSTERDAM (Reuters) - Corporate Express said on Tuesday it was willing to talk to U.S. office supplies retailer Staples Inc after it raised its offer for the Dutch business products wholesaler.
By Aarthi Sivaraman and Gilbert Kreijger
NEW YORK/AMSTERDAM (Reuters) - Corporate Express said on Tuesday it was willing to talk to U.S. office supplies retailer Staples Inc after it raised its offer for the Dutch business products wholesaler.
Staples raised its offer by more than 10 percent to 8 euros per share from a previous bid of 7.25 euros, which Corporate Express has repeatedly rejected as too low.
The Dutch firm said in a statement it was willing to talk to Staples about the revised offer and did not reiterate that Staples' offer undervalued the company.
!ADVERTISEMENT!Based on about 182.1 million shares in issue, the new offer values Corporate Express at about 1.46 billion euros ($2.3 billion). Including debt, it is worth about 2.6 billion euros.
Analysts said the offer might have to rise further, and shares in Corporate Express touched a high of 8.15 euros and were up 6.3 percent at 8.09 euros by 0837 GMT, outperforming a 0.5 percent rise of the Amsterdam blue chip index.
The new offer showed Staples wanted to succeed with its bid and could be willing to raise its offer again, Rabo Securities analysts Philip Scholte and David Tailleur said in a note.
Analysts had anticipated that Staples would raise its bid for Corporate Express and said that a tie-up between the retailer and wholesaler of office supplies would make strategic sense and could lead to big savings at a time both companies seek to combat a downturn in the U.S. economy.
Before Corporate Express made its statement, Staples said its attempt to hold talks with the company, as recently as last Friday, had failed after the board refused to negotiate.
"Given the unwillingness of Corporate Express to negotiate a transaction, we will make our offer directly to shareholders," Staples Chief Executive Ron Sargent said in a statement.
"We are offering certain cash values versus the considerable uncertainties of management's long range guidance," he added.
Corporate Express trades at about 15 times projected 2008 earnings versus a price-earnings ratio of about 14 for Staples and 12.6 for U.S. rival Office Depot Inc.
SHAREHOLDER PRESSURE
Staples said it has made significant progress in preparing for the offer -- it has obtained U.S. antitrust clearance, met with Dutch trade unions and submitted a request for approval with the Dutch market regulator AFM.
Staples said it expected to launch a formal offer after it receives approval from the AFM and make its offer unconditional if at least 75 percent of shares were tendered.
Some Corporate Express shareholders may go to court to force its management to negotiate with Staples if it continues to refuse to talk to Staples, Dutch daily Het Financieele Dagblad reported on Tuesday before the raised offer was announced.
Corporate Express has fought off pressure to sell itself from hedge fund investors, installing new management last year who pledged to revive sales while keeping the firm independent.
The stock lost more than half its value during 2007 as U.S. sales slumped. It touched a five-year low of 3.18 euros in January but has more than doubled since then on the bid and as its fought back in the United States, where it generates around 50 percent of sales.
The firm reported operating profit of 50.5 million euros last week and the shares responded positively as Corporate Express confirmed its ambitious sales growth and margins targets.
(editing by Elizabeth Fullerton)
