UPDATE 3-Staples launches hostile bid for Corporate Express
(Adds Corporate Express comment)
AMSTERDAM May 19 (Reuters) - U.S. office supplies retailer Staples Inc (SPLS.O) launched a hostile 1.5 billion euro ($2.34 billion) bid on Monday for Corporate Express NV CXP.AS because the Dutch office supplier was unwilling to negotiate.
Staples said in a statement that Corporate Express shareholders could tender their shares as of Tuesday until June 27, subject to a possible extension.
Corporate Express repeated in a statement that Staples' offer of 8 euros per shares was too low and failed to reflect the company's prospects. Last week, it rejected Staples' sweetened offer, but said it was willing to talk. Staples had offered 7.25 euros.
The equity value of the offer is 1.46 billion euros, based on a price of 8 euros for 182.848 million ordinary Corporate Express shares outstanding. Including net debt, the bid is worth about 2.8 billion euros, Staples said.
Staples, which competes with U.S. rival Office Depot Inc (ODP.N), has secured a $3 billion credit line for the deal.
"We are making this offer directly to the shareholders following Corporate Express' unwillingness to allow us to perform due diligence and negotiate a transaction," Staples Chief Executive Ron Sargent said in the statement.
A tie-up between a retailer and wholesaler of office supplies would make strategic sense and could lead to big savings at a time when both companies are trying to deal with a downturn in the U.S. economy, analysts have said.
Staples gets more than half of it sales, totaling $19.4 billion in 2007, through its retail outlets and operates more than 2,000 stores worldwide, but its business-to-business operations are more profitable.
The shares of Corporate Express, which had sales worth 5.6 billion euros in 2007, have been trading above 8 euros since Staples increased its offer and some analysts have said Staples would need to raise its offer further to clinch the deal.
Corporate Express shares closed at 8.10 euros on the Amsterdam exchange on Monday. Analysts at Rabo Securities have said a raised offer could be as high as 9 euros.
Staples shares, which have gained about 8 percent since the company raised its offer last week, closed down 1.09 percent at $23.57.
Staples said it would declare its offer unconditional if it could obtain at least 75 percent of Corporate Express' ordinary shares and met certain other conditions.
It expected antitrust clearance for the deal in Canada and the European Union in the next few weeks and it had already obtained U.S. antitrust approval.
Staples offered 3.15 euros per unit for Corporate Express CEXP.AS preference A shares, which closed at 3.12 euros and are worth 166 million euros, Euronext exchange data showed.
The U.S. company also offered 1,164.72 euros per unit for Corporate Express' 2010 convertible bond and it expected to launch offers later this week for debt issued by Corporate Express U.S. Finance Inc.
Corporate Express had 1.087 billion euros in net interest- bearing debt on March 31, it said earlier this month.
Lehman Brothers Holdings Inc LEH.N is providing Staples with financial advice; Clifford Chance LLP and WilmerHale LLP are providing legal and tax advice; and Weil Gotshal & Manges LLP is providing antitrust advice, Staples said. (Reporting by Gilbert Kreijger, editing by Dave Zimmerman and Andre Grenon)
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