Corporate Express turns down Staples’ $3.7B bid
Office supplies retailer’s bid just not enough to grab distributor’s interest.
By Dave Hannon -- Purchasing, 2/19/2008 7:03:00 PM
Office products retailer Staples needs to come up with more than $3.7 billion if it wants to snag its competitor Corporate Express.
After moths of speculation and reportedly several attempts to make a deal, Staples today offered up that much for Dutch firm Corporate Express and received a rejection less than two hours later. "Corporate Express is of the opinion that this proposal significantly undervalues the company and fails to reflect Corporate Express' prospects," the company said.
Why is Staples so hungry to acquire Corporate Express, a distributor, and not other office products retailers? Anthony Chukumba, an analyst with FTN Midwest Securities told the Associated Press that the purchase 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."
And Credit Suisse analyst Gary Balter told Reuters that a deal between Staples and Corporate Express could heighten the need for Office Max and Office Depot to merge.
Most market experts are predicting that Staples will come back with another bid.
See also: Office products suppliers and retailers see weaker sales than expected
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