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UPDATE 1-Office Depot urges rejection of holder nominees
March 18, 2008 / 2:16 PM / 10 years ago

UPDATE 1-Office Depot urges rejection of holder nominees

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ATLANTA, March 18 (Reuters) - Retailer Office Depot Inc ODP.N on Tuesday urged shareholders to reject one shareowner’s bid to nominate two directors in an attempt to remove its current and former chief executives from the board.

The shareholder, Woodbridge Group, had said on Monday it intended to nominate former presidents of Office Depot and rival Staples Inc SPLS.O to the Office Depot board to serve in place of two company candidates, current CEO Steve Odland and former CEO David Fuente.

Woodbridge Group, which includes real estate developer Levitt Corp LEV.N, said Office Depot “needs new representation” to revitalize the retailer, which it added had lost vision and its competitive standing.

But Office Depot said in its statement on Tuesday that removing Odland and Fuente from the board in favor of Woodbridge’s “dissident” nominees “would be highly disruptive, and could destabilize the company and damage prospects for a successful turnaround.”

The tension leading up to the April 23 annual meeting comes as Office Depot’s financial results have suffered. Its stock price has fallen 69 percent in the past year.

The retailer reported a bigger-than-expected drop in fourth quarter profit last month as slowing job growth, the crumbling U.S. housing market and credit market jitters led small business customers to curb spending.

Also in February, a regulatory filing disclosed that the U.S. Securities and Exchange Commission was investigating Office Depot for allegedly making a series of phone calls to analysts last June, warning them that weak economic conditions were hurting sales. Office Depot also announced last month that its chief financial officer resigned.

Woodbridge Group said it would nominate ex-Office Depot President Mark Begelman and former Staples president, Martin Hanaka, for the Office Depot board, adding that the two were committed to “taking immediate and aggressive action to turn around Office Depot’s business and redefine its position in the marketplace.” (Reporting by Karen Jacobs; Editing by Maureen Bavdek)

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