Starboard Value Nudges Office Depot To Create Some Shareholder Value. In Totally Unrelated News, Office Depot to Merge With OfficeMax.


On September 18, 2012, we reported that Starboard Value was having a shredding party with Office Depot (ODP), announcing it owned over 13% of its shares and telling them how to run their business.  ODP closed at $2.59/share that day.  In that post, we mentioned that the good folks at Starboard would probably push for some sort of transaction by translating their public disclosure:

“Translation:  If ODP doesn’t do what we say and the stock price doesn’t rise, our intentions will be the opposite of what we just said.”  [Ed.: After discussing Starboard's assertion that it has not intentions toward a fundamental change.]

We also embedded the ultra-creepy Extenze commercial with a paper-thin attempt at relevance to the issue at hand.

Fast forward to February 19, 2013, Office Depot enters into a merger agreement with OfficeMax (OMX), and its stock price closes at $5.02/share.  Office Depot filed its Form 10-K today with the following as its only nod to the signficant development:

“On February 19, 2013, the Company entered into a definitive merger agreement (the “Agreement”) with OfficeMax Incorporated (“OfficeMax”), pursuant to which the Company and OfficeMax would combine in an all-stock merger transaction. At the effective time of the merger, the Company would issue 2.69 new shares of common stock for each outstanding share of OfficeMax common stock. In addition, at the effective time of the merger, the Company’s board of directors will be reconstituted to include an equal number of directors designated by the Company and OfficeMax. The parties’ obligations to complete the merger are subject to several conditions, including, among others, approval by the shareholders of each of the two companies, the receipt of certain regulatory approvals and other customary closing conditions.”

Well done, Starboard.

We should see the Form 8-K describing the terms of the merger in more detail within the next couple of days.

Office Depot Form 10-K

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