BOSTON — Corporate Express NV swiftly rejected an unsolicited buyout offer from Staples Inc. today, saying the office products supplier’s $3.67 billion bid was too low.
Staples, the world’s largest office products supplier, disclosed earlier in the day it had offered to pay a hefty premium in an all-cash bid for Corporate Express.
The Netherlands-based office supply delivery firm’s U.S. subsidiary — called Corporate Express U.S. — is based in Broomfield.
“Corporate Express is of the opinion that this proposal significantly undervalues the company and fails to reflect Corporate Express’ prospects,” Corporate Express said in a news release, about two hours after Staples announced its bid.
Corporate Express said the offer was not in its shareholders’ best interests.
“We therefore reject this proposal and reiterate our commitment to pursuing our declared strategy,” the company said.
Staples’s offer for Corporate Express came after it made repeated attempts in recent months to discuss a deal.
“We have been disappointed that you have not been willing to do so,” Staples Chairman and Chief Executive, Ronald Sargent, said in a text of a letter to Corporate Express’ CEO and board.
Framingham, Mass.-based Staples said it would pay 7.25 euros — equal to $10.63 — per share for Corporate Express.
Staples said that amount represents a 67 percent premium to Corporate Express’s closing share price on Feb. 4, before rumors of an offer started circulating. When measured against Corporate Express’s closing price on Monday in European trading, the offer represents a premium of about 33 percent.
Corporate Express’ U.S. shares rose $3.17 to $11.26 in morning trading. Shares of Staples fell 18 cents, or 1 percent, to $21.86.
Staples said its cash offer gives Corporate Express a chance to move quickly after the Dutch company announced “strategic reorientation” plans following a recent decline in its stock price, which briefly rose above $15 a share on the New York Stock Exchange in July.
Staples said its offer “would result in superior benefits for Corporate Express’ stakeholders, and that such benefits can be achieved more completely and quickly than under your strategic reorientation plans, and with a higher degree of certainty.” Staples’ delivery business has consistently posted stronger growth than its retail operations in recent years, with economic concerns in the U.S. recently weighing on retail growth.
A purchase of Corporate Express “is an opportunity to gain scale in the fastest-growing, most profitable part of the office supplies business,” said Anthony Chukumba, an analyst with FTN Midwest Securities. “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.” Corporate Express was known as Buhrmann NV until last spring, when it changed its trading name to that of its most well-known brand, the Colorado-based corporation it acquired in 1999.
Corporate Express has contract operations in 20 countries, with total sales of $8 billion in 2006. About half those sales came in the U.S. and Canada, and about half the company’s 18,000 employees are in the U.S.
Staples, a 22-year-old firm with about 74,000 employees, had 2006 sales of $18.2 billion. The company has more than 2,000 retail stores in 22 countries in North and South America, Europe and Asia.
