Office Depot Inc ODP.N said on Wednesday it had agreed to allow three executives nominated by its largest shareholder Starboard Value LP to sit on the board of directors, staving off proxy solicitation by the activist investor hedge fund.
Starboard Value, which holds a 14.6 percent stake in Office Depot, had initially nominated six members to the board of the second-largest U.S. office supply retailer, citing the lack of experience among current board members.
Hours before its annual shareholders meeting, Office Depot said in a statement it had reached a settlement with Starboard on the structure of the board.
Office Depot said three of Starboard's nominees - Cynthia Jamison, Jeffrey Smith, and Joseph Vassalluzzo - will now join its board, and Starboard would in return withdraw its proxy solicitation bid.
The announcement did not mention a standstill provision that would prevent Starboard from nominating directors until 2014.
The retailer revealed plans in February to buy smaller rival OfficeMax OMX.N in an all-stock deal worth $937.2 million. They have not yet decided on the combined entity's name, headquarters or CEO. The companies are awaiting regulatory and investor approval.
(Reporting by Krithika Krishnamurthy in Bangalore; Editing by Miral Fahmy)