Starboard Value LP has urged Office Depot Inc. (ODP) to explore sale of office depot de mexico joint venture interest. Starboard also asked the board of directors of Office Depot to immediately seek OfficeMax Inc.'s (OMX) approval to sell this asset and for OfficeMax to consent to such sale.
Starboard Value LP, together with its affiliates, currently owns approximately 14.8% of the outstanding common shares of Office Depot. In a letter, Starboard restated its belief that the significant value of Office Depot's 50% joint venture interest in Office Depot de Mexico is not fully reflected in the stock price of the Company.
Starboard noted that, on February 15, 2013, the Board received an offer from its joint venture partner, Grupo Gigante S.A.B. de C.V. , to purchase the JV Interest for $690.5 million.
Given that Gigante's offer expires this Thursday, February 28, Starboard said it believed the Board of Office Depot should promptly obtain consent from OfficeMax under the merger agreement to immediately explore a sale of the JV Interest to maximize value for shareholders.
Starboard believed it is the Board's fiduciary duty to monetize the Company's interest in the joint venture given the clear benefit to both Office Depot and OfficeMax as a combined company and Office Depot as a stand-alone company.
Starboard said it recognized that OfficeMax is potentially conflicted as a sale of the JV Interest, while beneficial to the combined company, would also be beneficial to Office Depot as a stand-alone business and, therefore, may strengthen a competitor should the merger not be completed.
Starboard noted that if OfficeMax does not consent to Office Depot's negotiations with Gigante or any other potential buyer regarding the sale of the JV Interest, Starboard would view this as both unreasonable and potentially anti-competitive.
On 20th February, Office Depot agreed to acquire peer OfficeMax in an all-stock merger deal valued at about $1.2 billion.
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