Nov 16 Activist hedge fund Starboard Value asked
Office Depot Inc to immediately revoke its "poison pill"
provision, claiming it limits the influence of shareholders.
In September, Starboard said it took a 13.3 percent stake in
Office Depot, the No. 2 U.S. office supply retailer, making it
the biggest shareholder in the company. On Friday, the hedge
fund said it owned a 14.8 percent stake.
"We believe the implementation of the poison pill, with a
threshold just above our current ownership, is designed
specifically to entrench the current board," Starboard said in a
letter to the board.
Shares of Office Depot fell 19 cents, or 6.4 percent, to
$2.77 in afternoon trading on the New York Stock Exchange.
"The board's adoption of the shareholder rights plan was
carefully considered and is clearly in the best interests of
shareholders," said Office Depot spokesman Brian Levine.
Office Depot has been facing tough competition from other
office products suppliers as well as mass merchants and
Sales at office supply retailers have suffered as corporate
customers and other shoppers cut back on discretionary spending
in the weak global economy.
Same-store sales at Office Depot's North American stores
fell 4 percent in the third quarter.
Meanwhile, shares of rival OfficeMax Inc soared on
Friday on expectations the office supply chain will benefit from
an initial public offering of wood products maker Boise Cascade
LLC, in which it holds a 20.4 percent stake.
Shares of OfficeMax were up 15.3 percent at $9.49 late in
the day after rising as high as $10.62.