Corporate Express rejects Staples bid
By Staff -- Purchasing, 3/13/2008 2:00:00 AM
After several days of speculation that Framingham, Mass.-based office supplier Staples was interested in acquiring Corporate Express, the company made a formal offer of $3.67 billion for its Dutch rival. Corporate Express rejected the bid about two hours after it was first made, saying in an official press release: "[T]his proposal significantly undervalues the company and fails to reflect Corporate Express' prospects."
Since the bid's rejection, Staples has not commented that it will make a follow-up offer, and Corporate Express has not ruled out the possibility of counter-bids from other rivals such as Office Max or Office Depot.
If an acquisition of Corporate Express were to be successful, Staples, which is a dominant player in the U.S. office supplies market, would gain inroads to new corporate customers in markets where Corporate Express traditionally does well, especially Europe and Australia. In the U.S., a Corporate Express acquisition would bolster Staples' delivery and printing capabilities in addition to its current holdings in office furniture and supplies.
In an interview with the Associated Press, Anthony Chukumba, analyst at FTN Midwest Securities, says that a Staples acquisition of Corporate Express "is an opportunity to gain scale in the fastest-growing, most profitable part of the office supplies business. There would be massive opportunities for Staples to have cost synergies by paring back Corporate Express' sales force, as well as revenue synergies, by selling customers more services than they're buying right now." The integration of customer bases would be "easy" for Staples to do, since Corporate Express' accounts are exclusively corporate, says Chukumba.
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