Office Depot Merger With OfficeMax Supported By Investor

Office Depot Merger With OfficeMax Supported By Investor

One of the top investors of OfficeMax Inc reportedly supports a merger between the company and Office Depot Inc depending on the terms of the deal.

According to Neuberger Berman LLC’s Benjamin Nahum, he favors a special dividend declaration by OfficeMax before it merges with Office Depot. He indicated that a fair deal will be facilitated by declaration.

The third biggest office supply chain in the US is supposedly in advanced discussions with it possible merger the company, according to a source who had knowledge about the talks. It is possible for a deal to emerge within the week.

Although the discussions are already ongoing, there is still the possibility that it will not be finalized, the source added. The source also said that the merger may be a stock-for-stock deal between the two companies.

With the gradual increase in online shopping, office supply companies are dealing with similar problems facing bookstores and newspapers. Analysts have encouraged consolidation in the office supply industry as major firms fight to become relevant in this increasingly online-based world.

Shareholders of OfficeMax should be given compensation due to the strength that it brings to the balance sheet of the company that will emerge after it merges with Office Depot, Neuberger Berman indicated.

Reports followed the call of Neuberger Berman for OfficeMax to offer dividends or share repurchases, which resulted to fears of a possible proxy fight if the call is not heeded.

The Office Depot is also dealing with pressure from Starboard Value LP, the third biggest shareholder of the company. The active hedge fund has called for action to enhance the performance of the company.

Neuberger Berman is the third biggest shareholder of office supply retailer with a 4.76 percent stake in the company. No statements were released by Office Depot and OfficeMax in connection to the possible merger between the two companies.

Posted by James Fried on Tuesday February 19 2013, 1:54 PM EST. Ref: Reuters. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0