Local News
Office Depot to buy OfficeMax
Highlands Today
Published: February 20, 2013
SEBRING Office Depot Inc. announced Wednesday morning it would buy OfficeMax in an all-stock deal.Published: February 20, 2013
Sebring has both stores, across U.S. 27 from each other. OfficeMax shares a shopping center with Winn-Dixie; Office Depot north of Home Depot.
There was no immediate word from Office Depot Inc., based in Boca Raton, or Office Max, based in Naperville, Ill., if or when one store would close.
The move would combine the No. 2 and No. 3 office supply retailers and lead to consolidation in an industry that analysts have said for years is overstored. It reflects the changing retail landscape as "big box" stores become outmoded and more people shop online.
OfficeMax said holders of OfficeMax shares will receive 2.69 shares of Office Depot for every OfficeMax share they own. That's equal to about $13.50 per share, based on Office Depot's $5.02 per share closing price Tuesday, giving the deal a total value of about $1.2 billion.
Office Depot posted the news in its earnings release on its Web site on Wednesday morning, but the release later seemed to be taken down from the site. Office Depot and OfficeMax did not respond to requests for an explanation.
Office Depot and OfficeMax, along with bigger rival Staples Inc., were all founded in the mid- to late 1980s and pioneered the big-box boom. During the recession, the companies have closed stores, slashed costs and streamlined operations to offset stagnant sales. Rumors about possible consolidation have swirled around the sector for years.
The Wall Street Journal reported the possibility of the deal on Monday, sending stock across the sector soaring on Tuesday. Analysts say that if the deal closes, it would likely benefit Staples Inc., since a combined Office Depot-Office Max will likely close stores. Staples is much larger with 2,295 stores worldwide and a market capitalization of $9.56 billion.
The deal still has to go through shareholder and regulatory approvals, and office supply mergers have been questioned by regulators in the past. In 1997, Staples Inc. attempted to buy Office Depot, but the deal was nixed by the Federal Trade Commission due to concerns the combined company would have too much of a competitive advantage in the marketplace.
Office Depot shares rose 46 cents, or 0.2 percent, to $5.48 in morning trading. OfficeMax shares rose $1.43, or 11 percent, to $14.43 in premarket trading and Staples shares rose 15 cents to $14.80. Office Depot reported reported a net loss of $17 million in the fourth quarter of 2012.