UPDATE 1-Office Depot shareholder calls for sale of Mexican JV

Wed Feb 27, 2013 8:33am EST

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* Largest shareholder Starboard owns 14.8 pct of Office Depot

* Starboard says not selling stake will be "anti-competitive"

Feb 27 (Reuters) - Office Depot Inc's largest shareholder, Starboard Value LP, urged the office supply chain's board to explore the sale of its Mexican joint venture interest soon.

Starboard, which owns a 14.8 percent stake in the company, said in a letter to the board it believes the value of Office Depot's 50 percent joint venture interest in the Office Depot de Mexico business is not fully reflected in the retailer's stock price.

Mexican retailer Grupo Gigante, which owns the other half of the venture, said on Feb. 21 it offered 8.78 billion pesos ($687.34 million) to buy the stake that it does not already own, and that the offer would expire soon.

Grupo Gigante earlier bid for the stake in 2008, but was turned down by the office supply chain.

Starboard said given that Grupo's offer expires on Feb. 28, Office Depot should promptly obtain consent from OfficeMax under its merger deal to immediately explore a sale of the interest.

"If OfficeMax does not consent to Office Depot's negotiations with Gigante or any other potential buyer regarding the sale of the JV Interest, Starboard would view this as both unreasonable and potentially anti-competitive," the shareholder said in the letter.

Office Depot said last week it would merge with smaller rival OfficeMax Inc in a $976 million all-stock deal.

Shares of Office Depot were up 2 percent in premarket trading on Wednesday. They closed at $3.99 on the New York Stock Exchange on Tuesday.

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