Office Depot has rejected a takeover offer from Staples citing regulatory concerns, but the company signaled it was open to moving forward with a separate, streamlined transaction or joint venture with its rival.
In a letter, Joseph Vassalluzzo, the chairman of Office Depot’s parent, ODP, said the company was open to selling its retail and e-commerce businesses, noting a different deal “could be executed more efficiently and with far greater certainty and less regulatory risk” than the current proposal.
On January 11, Staples offered Office Depot $40 per share in cash or more than $2 billion for outstanding shares.
“The board has unanimously concluded that there is a more compelling path forward to create value for ODP and its shareholders than the potential transaction described in your proposal,” Vassalluzzo said in a letter addressed to Stefan Kaluzny, managing director at Sycamore Partners and a board member at USR Parent, the subsidiary that owns Staples.
This is the third time Staples has tried to acquire Office Depot. The Federal Trade Commission rejected previous merger attempts between the two office-supply companies in 1997 and 2016.
Meanwhile, MGM Resorts said it had no plans to submit a revised proposal to buy Entain, the parent company of sports-betting company Ladbrokes, after Entain rejected an $11 billion offer it made earlier this month. In a statement, MGM said it remained committed to working with Entain in their current U.S. joint venture, BetMGM, to ensure “strong momentum.” MGM said it expected BetMGM to be operational in 20 states by the end of the year.
“Our U.S. sports betting and online gaming venture with Entain remains a key priority for the company as we continue to leverage our preeminent physical gaming, entertainment, and hospitality platform to expand digitally,” MGM Resorts chief executive officer Bill Hornbuckle said.
Entain had said the offer “significantly undervalues the company and its prospects.”
Entain shares fell nearly 12% on the news.