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Corporate Express Shuns Staples’ $3.7 Billion Takeover Offer

By Mike Caggeso
Associate Editor

Staples Inc.’s (SPLS) $3.7 billion (2.5 billion euro) takeover offer for Dutch rival Corporate Express N.V. (CXP) was promptly rejected yesterday (Tuesday).

The all-cash offer valued shares at a 34% premium to Monday’s closing price on the Dutch Stock Exchange – sending the company’s stock up 38.94% for the day Tuesday. But Corporate Express executives said the "unsolicited" offer still doesn’t agree with their estimates and intentions.

"Corporate Express is of the opinion that 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. "We therefore reject this proposal and reiterate our commitment to pursuing our declared strategy."

That might be an overstatement, as the company’s stock has had a terrible year – falling from its 52-week high of $15.45 in July to $5.20 in January because of disappointing earnings. Takeover rumors and a generous takeover offer were the only cause for the shares recent bump in value.

Talk of a takeover has swirled since Feb. 5, when news broke that Corporate Express was subject to a buyout, Dow Jones reported.

OfficeMax Posts Profit, Issues Warning

In related news, share of Staples rival OfficeMax Inc. (OMX) rose nearly 8% during day trading after it announced profit rose 23% to $71.5 million, or 92 cents a share, for the fourth quarter.

The Naperville, Ill.-based company made a significant effort to cut costs after a year of disappointing sales and earnings, the Wall Street Journal reported.

Still, its latest earnings report shows that sales for the country’s third-largest office supplier declined for the quarter and the company expects the slow U.S. economy to affect sales this year.

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This entry was posted on Tuesday, February 19th, 2008 at 10:53 pm and is filed under Mike Caggeso, Take Over, Top News. You can follow any responses to this entry through the RSS 2.0 feed. Due to the amount of comments we receive Money Morning will not be able to respond to all questions. If you have not already registered to leave a comment, once doing so you will receive Money Morning's Daily Email. Responses are currently closed, but you can trackback from your own site.