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Office Depot Delays Split, Considers Offer For Its Retail Business

ODP, the parent company of Office Depot, is delaying its planned split into two public companies, one focused on retail and one on B2B, as it evaluates offers to purchase its consumer business from both Staples and from a new undisclosed potential purchaser.

ODP, the parent company of Office Depot, Friday said that its board of directors has decided to delay the split of the company into two separate public companies after the company received interest in its consumer business.

The move, coming on the heels of its New Year’s Eve announcement that ODP plans to sell its CompuCom systems integration business to an affiliate of Variant Equity Advisors, is the latest in a long-running saga over the future of the company.

The sale of CompuCom and the move to divide the remainder of ODP has been expected ever since Office Depot, a leading provider of business services and supplies and technology, early last year unveiled a bid by rival Staples.

[Related: 5 Things To Know About Staples’ Bid To Acquire Rival Office Depot]

USR Parent, the corporate name of Staples, in January offered to acquire Office Depot in a $2.1 billion deal. As part of that deal, Staples proposed the eventual divestiture of Office Depot’s business-to-business-focused holdings, including IT managed service provider CompuCom.

USR Parent in November told ODP that its non-binding $1-billion cash offer to purchase ODP’s consumer business, which includes its Office Depot and OfficeMax retail stores business, the Company‘s direct channel business, and the Office Depot and OfficeMax intellectual property, including all brand names, remains in play.

However, ODP said Friday, the company in December received a non-binding proposal from a different third party to acquire its consumer business. The terms of that proposal were not released. Because of that, the ODP board of directors has decided to delay further work on the separation of the company to avoid potentially unnecessary costs, the company said.

Office Depot in May unveiled plans to separate into two independent, public companies by means of a tax-free spin-off to ODP shareholders. The first consists of its company’s retail consumer and small business services that are sold through e-commerce and about 1,100 retail Office Depot and OfficeMax location.

The second is based on Office Depot’s B2B business, which includes the ODP Business Solutions Division, Canada-based Grand & Toy, and ODP’s regional office supply distribution business, along with ODP’s new B2B digital platform technology business, but not including CompuCom.

Office Depot, also known by its ODP ticker symbol, did not respond to CRN request for more information.

However, in a prepared statement, ODP CEO Gerry Smith said the company is looking at which option provides its shareholders the best value.

“We look forward to further evaluating the potential sale of ODP’s consumer business to determine whether a sale may provide greater value for our shareholders than a public company separation,” Smith said. “If the consumer business is not sold, then ODP’s board of directors will reevaluate the advisability and timing of the public company separation.”

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