NEW YORK, May 5 (Reuters Breakingviews) - Concise insights on global finance.
OFFICE SPACE. ODP (ODP.O), parent company of Office Depot, is shredding Staples’ merger script. After rejecting overtures from its privately held rival, known formally as USR Parent, it said on Wednesday it would separate into two companies. The announcement sent shares up around 10% to almost $47, well above Staples’ January offer price .
According to ODP Chief Executive Gerry Smith, the spinoff has "nothing to do with the Staples transaction at all." That may be the case, though takeover bids and activist agitation alike often jolt companies into accelerated action. The upshot is that Staples, which had also planned to offload the business-solutions division ODP is now going to spin off, will have to offer a higher price if it wants to buy its peer.
It’s a good outcome for Office Depot’s parent. Staples is the best and probably only bidder for its consumer business. Smith is recreating the effect of a bidding war, telling public investors along the way that he had planned to give them more value all along. (By Lauren Silva Laughlin)
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