U.S. office supplies retailer Staples raised its hostile offer for Corporate Express by more than 10 percent, valuing its target at about 1.5 billion euros ($2.3 billion), and said the Dutch business products wholesaler was still refusing to talk.
Staples said it had raised its offer to 8 euros per shares from a previous bid of 7.25 euros, a deal Corporate Express has repeatedly turned down as too low.
Based on about 182.1 million shares in issue, the new offer values Corporate Express at about 1.46 billion euros.
Including debt, it is worth about 2.6 billion euros.
Staples' attempt to hold talks with Corporate Express, as recently as last Friday, failed after the Corporate Express board refused to negotiate the merits of its offer, the company said.
Corporate Express declined to comment on Tuesday.
Staples said its latest offer was a premium of about 51 percent to the Corporate Express closing share price on Feb. 18 before its initial approach was announced.
Shares in Corporate Express were up 5.7 percent at 8.04 euros, topping the bid value of 8 euros.
"Given the unwillingness of Corporate Express to negotiate a transaction, we will make our offer directly to shareholders," Staples Chief Executive Ron Sargent said in a statement.
"We are offering certain cash values versus the considerable uncertainties of management's long range guidance," he added.
Analysts had anticipated that Staples would have to pay more than its original bid for Corporate Express, and their consensus was that a tie-up between the two would make strategic sense and could lead to big savings at a time both companies seek to combat a downturn in the U.S. economy.
The U.S. office supplies retailer said it has made significant progress in preparing for the offer -- it has obtained U.S. antitrust clearance, met with Dutch trade unions and submitted a request for approval with the Dutch market regulator AFM.
Staples said it expects to launch a formal offer after it receives approval from the AFM.
Some Corporate Express shareholders may go to court to force its management to negotiate with Staples if it continues to refuse to talk to Staples, Dutch daily Het Financieele Dagblad reported on Tuesday before the raised offer was announced.
"Only if both parties sit down together will it be possible to have a good estimate of the synergies between the two parties," the paper quoted a shareholder as saying, who wanted to remain anonymous.
"It is unknown that a board can just reject a 70 percent higher bid," the shareholder said, referring to the premium to the 4 euros the shares were trading around before the bid.
Corporate Express has fought off pressure to sell itself from hedge fund investors, installing new management last year who pledged to revive sales while keeping the firm independent.
The stock lost more than half its value during 2007 as U.S. sales slumped.
It touched a five-year low of 3.18 euros in January but has more than doubled since then on the bid and as its fought back in the United States, where it generates around 50 percent of sales.
The firm reported operating profit of 50.5 million euros last week and the shares responded positively as Corporate Express confirmed its ambitious sales growth and margins targets.