As the above title suggests, discussions between CE and Staples have been succesful. In this news release CE informs us that they recommend shareholders to accept the increased offer of EUR 9.25 per ordinary share. The increased offer was possible because Staples purchased ordinary shares at the increased price in a transaction, other than an ordinary market transaction. Under Dutch takeover rules this increased price must apply to all other shareholders as well. Peter Ventress will become President of Staples International, to oversee Staples’ business outside of the United States and Canada and will play a key part in managing the integration of the two businesses going forward. He will report to Ron Sargent, Staples’ Chairman and CEO. You can also read the news release by Staples. (end of post)
Read more...woensdag 11 juni 2008
maandag 9 juni 2008
Q&A session Peter Ventress and Eric Bigeard
A couple of days ago Dutch financial website IEX published the answers to questions that were submitted by visitors of their website to Mr. Ventress and Mr. Bigeard. I am posting this, because it gives some information directly from the source, but as can be expected, the answers are very predictable and in line with information we already received through other communications from CE about the Lyreco deal. On a question about the better margin of Lyreco, Mr. Bigeard answers that they have a very sophisticated business model, supported by modern distribution centers and a fully centralized IT system. Mr. Ventress answers that CE has a new strategy since October last year. With an answer like this the deal sounds more like a reverse take over, where Lyreco, with the CEO position, will effectively start managing the combined company, and gets paid handsomely for the privilege. (end of post)
Read more...Reuters: "Staples has 9.5 pct of Corporate Express"
It seems there is a lot of confusion with respect to shares and percentages. Reuters tries to play it safe in this article by mentioning both the 9.5% as reported by the AFM and the 12.3% mentioned by Staples. We know of course that Staples was talking about the percentage of ordinary shares, while the AFM looks at total voting rights, including preference shares. And even the AFM is a little confused, because they consider voting rights on preference shares equal to the voting rights on ordinary shares, while I have reasoned before that a preference share has a voting right equal to about 0.37 ordinary share. This would make the right percentage of Staples' shares, relevant to the shareholders meeting on June 18th equal to 11.1%. (end of post)
Read more...zaterdag 7 juni 2008
AFM notifications Staples and Halcyon
On the website of the AFM we can see that the purchase of ordinary shares by Staples has been registered. According to the information Staples purchased 22,456,115 ordinary shares, representing 9.51% of voting rights. There is also a notification from Halcyon Asset Management LLC, showing a holding of 13,389,000 shares or 5.67% of voting rights. Since only interests above 5% have to be registered, we can't tell if this interest is completely new, or if Halcyon only purchased an amount of shares that just pushed them above the minimum threshold. (end of post)
Read more...vrijdag 6 juni 2008
Staples Sets Offer Price for Senior Subordinated Notes
This news release from Staples is not as exciting as news about the share related offer, but is noteworthy anyway. Since Staples wants to capture most of the enterprise value of CE, and apparently some change of control covenants exist, an offer was made on these notes. It is interesting to read that Staples has received consent from holders of 98.67% of the principal outstanding amount of the 2014 Notes and 99.33% of the 2015 Notes to make some amendments to the indentures governing the notes. I suspect that holders of convertible bonds will behave more like holders of notes than like shareholders, which would mean that if all convertible bonds are tendered, Staples would secure another 16.7 million shares, or 7.4% of total fully diluted voting rights. For the shareholders meeting on June 18, this is however not relevant, because the convertible bonds do not represent actual current voting rights. (end of post)
Read more...CE already in talks with Staples since Tuesday
According to this Dutch article in "Het Financieele Dagblad", CE and Staples have been talking since Tuesday. It claims Peter Ventress invited Ron Sargent already on Tuesday immediately after the offer was increased and they spoke with each other almost all day on Thursday. Although it is not a real due diligence, Staples would have been provided with meaningful information. The article also states that CE regards the increased offer as a major step. Shareholders who explicitly support the Lyreco deal have not come forward yet. (end of post)
Read more...donderdag 5 juni 2008
Corporate Express enters buyout talks with Staples
CE and Staples have moved rapidly, with a spokesperson for CE confirming that the two companies already have begun discussions. In this article from AP we also learn that Lyreco CEO Eric Bigeard is still confident his deal will go through, and that he will continue communicating with shareholders in hopes of finalizing the deal, although he understands CE has agreed to talk to Staples. Further in the article an analyst gets his math wrong, when he confuses ordinary share capital with total fully diluted share capital, but you can judge that for yourself from an earlier post of today. (end of post)
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