From DailyTech: Staples, Inc. (SPLS), America's largest office supply retail chain, took a bold gamble on Wed., announcing a $6.3B USD bid for Office Depot, Inc. (ODP) America's only other major dedicated office retail chain. The deal offers Office Depot shareholders $7.25 USD/share in cash per share, plus 0.2188 shares of Staples stock per share of Office Depot stock. The total valuation is around $11 USD per share -- an appealing 45 percent premium over recent trading values (~$7.60 USD/share).
Despite the appeal to shareholders from a value standpoint there's a lot of concern, however, that the deal won't go through.
If allowed to complete the acquisition, Staples would gain a virtual monopoly on large office goods orders in North America -- is expected to face intense scrutiny from federal regulators, including possible lawsuits from the U.S. Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ).
To some this may seem like history repeating itself. Back in the Clinton era, in 1997, Staples made a $4B USD bid to acquire Office Depot. The FTC voted 4-to-1 to block the bid.
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