Office Depot urges stockholders to reject dissident shareholders' nominees for election to the board

By Lisa Kerner

Charlotte, N.C., March 31 - Office Depot, Inc. urged its stockholders to vote for the company's director nominees at its 2008 annual meeting on April 23 and to reject the "unqualified" dissident nominees proposed by Woodbridge Equity Fund LLLP and Levitt Corp. (together, Woodbridge Group), according to a company statement released on Monday.

In a March 31 letter to stockholders, Office Depot said its board is "highly qualified," citing its members' "extensive industry experience."

It was previously reported that Woodbridge Group asked fellow Office Depot shareholders to elect the investors' nominees, Mark Begelman and Martin E. Hanaka, to the company's board in order to change the status quo.

Begelman is former president and chief operating officer of Office Depot, while Hanaka is the former CEO of Sports Authority, Inc.

Both Begelman and Hanaka were considered and rejected for executive positions with Office Depot, the company said.

Office Depot's nominees are its current chairman and CEO, Steve Odland, and former chairman and CEO David I. Fuente, according to a Woodbridge Group news release.

According to Office Depot, from March 2005 to March 2007, its earnings per share grew 62% and its share price increased 70%. Odland joined the company in 2005.

Office Depot noted that Alan Levan, Levitt chairman and CEO, and his affiliates reported owning less than 1.1% of the company's outstanding common stock, with all but 200 of their shares acquired during the week before the investors launched their proxy contest.

In its letter to shareholders, the Delray Beach, Fla., office products company said Levitt's share price has dropped some 93% over the past three years and the company's wholly owned subsidiary, Levitt and Sons, is in bankruptcy.

In its own letter to shareholders, Woodbridge Group said Office Depot's stock is undervalued and the company has "significantly underperformed" its competitor, Staples, Inc.

According to Woodbridge Group, Office Depot's stock has fallen 69% over the last two years, closing at a low of $10.86 on March 17.

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