July 10 OfficeMax Inc shareholders voted
to approve its merger with larger rival Office Depot Inc
, removing a key hurdle to the deal that would combine
the No. 2 and No. 3 U.S. office supply retailers.
Office Depot stockholders also gave their nod on Wednesday
to issue the company's shares to OfficeMax shareholders
following the merger.
The two companies await regulatory approval for the merger
aimed at cutting costs and boosting their clout with suppliers.
Boca Raton, Florida-based Office Depot revealed plans to buy
Naperville, Illinois-based OfficeMax in February in an all-stock
deal worth $976 million.
The companies have not decided on the combined entity's
name, headquarters or chief executive.
Both companies, which trail industry leader Staples Inc
in terms of market share, are under pressure from
investors to boost profitability as well as shareholder value.
Office supply retailers, often seen as a barometer of
economic health, have suffered as demand for their products fell
after the recent U.S. recession.
They also face strong competition from Amazon.com Inc
and Wal-Mart Stores Inc in selling everything
from pens and notebooks to furniture to government, businesses
The thumbs-up came even as Office Depot's top investor
Starboard Value looks to get four new faces including the
investment firm's CEO on Office Depot's board.
Starboard has cited the lack of retail experience among
current board members of Office Depot and stressed the need to
reconstitute the board whether or not the proposed merger takes
place. Still, the largest shareholder of Office Depot has been
in support of the merger.
Office Depot shares were down 1.6 percent at $4.16 on the
New York Stock Exchange on Wednesday. OfficeMax shares were down
2 percent at $10.96.