Staples buys Corporate Express 2% convertible at upsized €1,346.71 price

By Susanna Moon

Chicago, June 11 - Staples, Inc. said it bought 5,000 Corporate Express 2% guaranteed subordinated convertible bonds due 2010 for €1,346.71 per bond, raised from €1,164.72.

The new price reflects the increase in Corporate Express stock to €9.25 per share from €9.15.

Staples announced the cash tender offer for the 2% convertibles on May 19. The tender offer is set to expire at 11:30 a.m. ET on June 27.

The company is conducting the tender offer through its subsidiary, Staples Acquisition BV, in connection with its €2.8 billion offer to acquire Corporate Express, which it is carrying out via an €8.00-per-share tender offer for the company's ordinary shares, according to a press release.

The tender offer for the convertibles is conditioned on Staples accepting a minimum of 75% of Corporate Express' ordinary share capital.

In February, Corporate Express shot down rumors that it was in discussions with Staples about a takeover. A few weeks later, Staples made an unsolicited €7.25-per-share bid to acquire the company, which Corporate Express rejected. Staples then increased the offer price to €8.00 on May 13 and took the offer public on Monday.

Staples is also holding a €3.15-per-share tender offer for Corporate Express' preference shares A and plans to launch a tender offer later this week 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.

Staples, an office superstore based in Framingham, Mass., will finance the offers with proceeds from a $3 billion credit agreement with Lehman Brothers Inc., Bank of America and HSBC Bank USA, with cash reserves and with borrowings under its revolving credit facility.

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

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