Office Depot rejects takeover offer from Staples, but says it's open to other types of ventures

Key Points
  • Office Depot rejected a takeover attempt by office supply rival Staples, according to a letter between company executives.
  • In the letter, the chairman of the board for the parent company of Office Depot said they would be open to another deal that draws less scrutiny from antitrust regulators.
  • It's the third attempt by Staples to acquire Office Depot.
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Office Depot has rejected another takeover attempt by office supply rival Staples, according to a letter sent Tuesday by a company executive.

However, the parent company of Office Depot, ODP, said it is open to a different kind of a deal, such as selling its retail and e-commerce businesses to Staples or agreeing to a joint venture, according to the letter.

In the letter, ODP Chairman Joseph Vassalluzzo wrote that a deal that's not a full takeover "could be executed more efficiently and with far greater certainty and less regulatory risk than your proposal."

"It would also help maintain competitiveness against nontraditional retailers and optimize ongoing choices for consumers," he wrote. The letter was sent to Stefan Kaluzny, managing director of Sycamore Partners and a board member of USR Parent, the subsidiary that owns Staples.

The rebuffed offer was first reported by The Wall Street Journal.

Shares of ODP were down more than 1.5% in midday trading Tuesday to $45.

Staples has sought to buy Office Depot's parent company, ODP, two other times. Five years ago, antitrust officials blocked a merger between the two companies and sent shares of the two companies tanking.

In the latest attempt, Staples proposed to purchase the company on Jan. 11 for more than $2 billion, or $40 a share, according to the Journal.

Along with Office Depot, ODC also owns OfficeMax, another chain of office supply stores, and CompuCom, an information technology company.

Read the letter here.

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