Office Depot owner ODP to spin off its distribution platform into a separate company

• Office Depot owner ODP said it would spin off its distribution platform, which schools, offices and other businesses use to buy supplies, into a separate company.
• ODP said the separated company would include ODP's business solutions division and Canadian office supplies retailer Grand & Toy.

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Shown is an Office Depot store at the Potrero Center shopping complex in San Francisco, Monday, April 23, 2007. Office supplies and services retailer Office Depot Inc. said Thursday, April 26, 2007 its first-quarter profit rose 20 percent, boosted by a jump in international sales and some modest growth in North America. (AP Photo/Eric Risberg)

Eric Risberg

Office Depot owner ODP said on Wednesday it would spin off its distribution platform, which schools, offices and other businesses use to buy supplies, into a separate company.

ODP, which rejected rival office supplies retailer Staples' offer to buy some of its assets earlier this year, said the separated company would include ODP's business solutions division and Canadian office supplies retailer Grand & Toy.

The new company will also own ODP's regional office supply distribution businesses, it said.

The spin-off is expected to occur through the distribution of shares of the new company as a tax-free dividend to ODP's shareholders and is projected to be completed in the first half of next year, the company said.

Shares of ODP, which also reported a 13% drop in first-quarter sales, rose 5% to $44.60 in premarket trading.