Colorado employees of Corporate Express could find themselves on the wrong edge of the paper cutter if Staples Inc.’s $3.7 billion bid for their company, announced Tuesday, is successful.
Amsterdam, Netherlands-based Corporate Express NV, the world’s largest office- supply company, has its U.S. headquarters in Broomfield and employs 1,800 people in the state.
Massachusetts-based Staples, the largest U.S. office-supply company, says its buyout of Corporate Express will generate significant cost savings.
“Anybody who is a Corporate Express salesperson may want to think about polishing up their resume right now,” said Anthony Chukumba, a senior analyst at FTN Midwest Securities Corp. in New York.
Likewise, corporate support positions will “get blown out,” he said.
But Staples hasn’t been able to hit its trademark big red “Easy” button in its effort to acquire Corporate Express.
Corporate Express executives have rejected face-to-face meetings with Staples management and dismissed the initial bid.
“This proposal significantly undervalues the company and fails to reflect Corporate Express’ prospects. We do not believe the proposal is in the best interests of our shareholders and other stakeholders,” the company said in a statement.
Both companies declined to comment about the buyout offer beyond prepared statements.
Chukumba said Staples can afford to raise its offer for Corporate Express and will likely do so once it gets a closer look at its competitor’s books.
Acquiring Corporate Express would give Staples a stronger presence in direct sales of office supplies to businesses and government, its fastest-growing business segment.
Staples is best known for its retail stores, while Corporate Express doesn’t sell directly to the consumer.
Odds are slim that a “white knight” will come to Corporate Express’ rescue with a richer bid than the $10.68 per share that Staples is offering.
That bid represents a 67 percent premium to where Corporate Express shares traded Feb. 4, the day before takeover rumors started circulating.
A credit crunch that started in August has cut the legs out from under private-equity firms and many other potential buyers, said Jerry Paul, a Denver hedge-fund manager specializing in merger arbitrage.
Staples’ chief competitor, Office Depot, has struggled to get its financial house in order, and OfficeMax, another competitor, is smaller than Corporate Express, Chukumba said.
Buhrmann, a Dutch office-supply company, paid more than $2.2 billion in cash and assumed debt in 1999 for Corporate Express, a company founded by Boulder entrepreneur Jirka Rysavy.
But the Dutch company has struggled to realize value from that acquisition and more than 30 others it has made since then.
Last April, Buhrmann changed its name to Corporate Express, the name of its U.S. subsidiary that accounted for half its sales.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
Company facts
Corporate Express
CEO: Peter John Ventress
Headquarters: Amsterdam, Netherlands
2007 revenues: 5.63 billion euros
Workforce: 19,000
Colorado presence: 1,800 employees divided among U.S. headquarters staff in Broomfield and Northglenn, customer-service and distribution centers in Aurora, and a distribution facility in Colorado Springs.
Staples Inc.
CEO: Ronald Sargent
Headquarters: Framingham, Mass.
2007 revenues: $18.16 billion
Workforce: 39,437
Colorado presence: 18 retail stores, fulfillment-center warehouse in Brighton and metro Denver area sales office.
