Corporate Express Thwarts Staples’ Bid
Amsterdam, Netherlands Office-supplies distributor Corporate Express NV showed its determination to fend off a hostile takeover by Staples Inc. on Wednesday, announcing plans to instead buy French peer Lyreco SAS for about $2.7 billion in cash and shares.
If approved by shareholder and regulators, a Corporate Express-Lyreco combination would create a sizable international competitor to Massachusetts-based Staples. Corporate Express-Lyreco would be larger than Staples in business-to-business sales in the United States, Europe and Asia.
Lyreco, like Corporate Express and unlike Staples, sells office supplies only to other businesses.
Corporate Express’ board rejected a $2.47 billion takeover offer from Staples last week, saying it undervalued the company. Staples took its hostile bid directly to Corporate Express shareholders on Monday.
This is the most logical and compelling merger one could envision in our industry,” said Corporate Express chief executive Peter Ventress in a statement. “The two businesses are highly complementary.”
The price Corporate Express is paying for Lyreco is more than its own market capitalization of 1.4 billion euros ($2.2 billion) as of Wednesday morning, and the Dutch company would issue shares, pay cash and take on debt to fund the acquisition.
It said that it would pay Lyreco shareholders 102.5 million new ordinary shares, representing 29.9 percent of its outstanding capital, 560 million euros ($877 million) in cash and 340 million euros ($532 million) in debt. The share component is worth around 830 million euros ($1.30 billion) at Corporate Express’s closing price Tuesday.
Analysts said the move was a crafty way for Corporate Express to take advantage of its share price—which has nearly doubled since Staples began courting it in February—to thwart the American company.
Stobb named investor relations head at Goodyear
AKRON, Ohio The Goodyear Tire & Rubber Co. announced that Patrick Stobb has joined the company as director of investor relations. Stobb will report to Darren Wells, Goodyear’s senior vp of finance and strategy.
Prior to joining Goodyear, Stobb was director of investor relations for TRW Automotive Holdings since 2003. He also held a variety of investor relations and finance positions with the Visteon from 2000 to 2003 and the Ford Motor Co. from 1997 to 2000.
Mervyns to open new stores, launch Web site
HAYWARD, Calif. Mervyns said it plans to open five new stores in its core markets in 2009. This brings the total number of new Mervyns stores to 17 since the company was acquired by its private equity owners three years ago, and reflects its commitment to maintaining a dominant real estate position in California and the Southwest. Concurrently, Mervyns reported it has engaged DJM Realty, LLC, one of the nation’s leading real estate advisory firms, to sell 5-10 underperforming, but high real-estate-value, stores. The real estate portfolio transition is expected to generate $25 to $50 million in cash to fund operations and new growth initiatives.
The company also announced it will launch a fully integrated e-commerce Web site in the fourth quarter of 2008. Mervyns said the e-commerce Web site presents a new growth vehicle and multi-channel opportunity for existing and new customers nationwide, and forecasts that the online platform could quickly grow into a $50 million business. Mervyns will partner with a nationally recognized provider of turnkey order entry and fulfillment services in launching its Web site.
Ceo John Goodman commented, “We have a plan that centers around our consumer and her needs, and we are putting the capital and people resources behind it to not only overcome the current difficult retail climate, but to gain market share and reinvigorate the Mervyns brand.”