Staples brings its €8.00-per-share cash offer directly to Corporate Express shareholders

By Lisa Kerner

Charlotte, N.C., May 19 - Staples, Inc. subsidiary Staples Acquisition BV began a public €8.00-per-share cash offer for any and all ordinary shares, including those represented by American Depositary Shares (ADS), of Corporate Express NV.

Staples upped its offer to €8.00 per share from €7.25 on May 13.

Corporate Express CEO Peter Ventress said Staples' initial offer "significantly" undervalued the company. The statement was made on May 13 in a 6-K filing with the Securities and Exchange Commission.

When combined with the €0.21-per-ordinary share dividend already paid to shareholders, the new offer price is a 90% premium over Corporate Express' closing price on Feb. 4, the day before offer rumors circulated, Staples noted.

Total value of the transaction, including debt, is estimated at some €2.8 billion ($4.3 billion).

"We are making this offer directly to the shareholders following Corporate Express' unwillingness to allow us to perform due diligence and negotiate a transaction," Staples chairman and CEO Ron Sargent said in a company news release.

Staples Acquisition also launched an all-cash offer for the preference shares A of €3.15 per share as well as an all-cash offer for the subordinated convertible bonds due 2010 of €1,164.72 per bond.

It was reported that Staples Acquisition intends to launch tender offers for the 8¼% senior subordinated notes due 2014 and 7 7/8% senior subordinated notes due 2015 issued by Corporate Express U.S. Finance Inc.

On April 1, Staples announced a definitive $3 billion credit agreement with financing arranged by Lehman Brothers Inc., Bank of America and HSBC Bank USA that, along with Staples' cash reserves and revolving credit facility, will be used for the company's acquisition of Corporate Express.

In February, Corporate Express denied rumors that it was in discussions with Staples about a take-over. A few weeks later, Corporate Express rejected the Framingham, Mass., office superstore's unsolicited €2.5 billion bid.

Corporate Express is a business-to-business office supply company based in Amsterdam.

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