logo
Plus   Neg
Share
Email

GPC Comments On Deal With Essendant Following Staples' Proposal To Buy Essendant

Genuine Parts Co. (GPC) commented on its previously announced definitive merger agreement to combine GPC's S.P. Richards business with Essendant (ESND) in response to the announcement of Staples, Inc.'s conditional, non-binding proposal to acquire Essendant for $11.50 per share in cash.

Staples is privately owned by Sycamore Partners, which filed a Schedule 13D reporting its acquisition of a 9.9% ownership stake in Essendant.

GPC said," As announced on April 12, 2018, GPC entered into a definitive agreement to combine our S.P. Richards business with Essendant. We are confident that combining the best elements of both businesses will create an even stronger company with the ability to capitalize on opportunities to create value for all of our stakeholders. We continue to make progress on our integration planning, and we remain committed to completing this transaction, which is on track to close before the end of 2018."

Genuine Parts said it does not believe Staples' conditional, non-binding proposal to acquire Essendant for $11.50 per share in cash to be a superior proposal nor reasonably likely to lead to a superior proposal as defined under the terms of the Merger Agreement. Indeed, given the proposed enhanced terms and the expected financial benefits of more than $75 million in annual run-rate cost synergies and more than $100 million in working capital improvements, GPC is confident that the merger between S.P. Richards and Essendant delivers superior value to Essendant's shareholders.

Earlier today, Essendant confirmed that it received an unsolicited proposal from Staples, Inc. to acquire all shares of Essendant stock for $11.50 per share in cash.

On April 17, 2018, Staples communicated its initial proposal to Essendant, which Essendant declined after thorough review by its Board in consultation with its financial and legal advisors.

Staples sent a revised proposal on April 29, 2018 stating that it believed it will be able to identify incremental value opportunities to enable it to increase its offer significantly in excess of $11.50 per share after receiving confidential information and engaging in discussions with Essendant.

On May 4, 2018, Essendant's Board determined that Staples' revised proposal is reasonably likely to lead to a "Superior Proposal" as defined in the merger agreement with Genuine Parts Company. There can be no assurance that the Staples proposal will result in a transaction.

On May 7, 2018, GPC made an enhanced proposal to the previously announced merger agreement with Essendant under which Essendant shareholders would be provided a nontransferable right to a contingent cash payment following completion of the merger and based on the subsequent trading price of Essendant shares. The contingent payment would have a maximum value of $4.00 per share and a minimum value of zero.

Specifically, the contingent payment would be equal to $12.00 per share minus the greater of (a) the weighted average price of Essendant shares during a 20-day measurement period ending at the later of (i) December 31, 2019 or (ii) the 12-month anniversary of closing, or (b) $8.00, subject to other terms and conditions.

As previously announced on April 12, 2018, Essendant entered into a definitive merger agreement to combine Essendant and GPC's S.P. Richards business in a Reverse Morris Trust transaction. Upon closing of the transaction, GPC shareholders will own approximately 51% and Essendant shareholders will own approximately 49% of the combined company. The merger agreement with GPC remains in effect, and the Essendant Board has not changed its recommendation that Essendant's shareholders vote in favor of that transaction.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Quick Facts

Editors Pick
Zynga Inc. (ZNGA), a social game developer, Tuesday said it has inked a multi-year deal with Disney to develop and publish a new "Star Wars" mobile game. Shares of Zynga is currently up nearly 8 percent, following the news. As a part of the agreement, Zynga will also assume operation of the live service... Furniture maker La-Z-Boy Inc. (LZB), Tuesday reported a profit and revenues for the first quarter that trounced Wall Street estimates, sending its shares surgtin about 20 percent in after-hours trade. Monroe, Michigan-based La-Z-Boy's first-quarter profit rose to $18.3 million or $0.39 per share from... Shares of Keysight Technologies Inc. (KEYS) are up 12 percent on extended session on Tuesday after the company's earnings and revenues for the third quarter trumped Wall Street expectations and outlook for the current quarter also exceeded estimates. Santa Rosa, California-based Keysight Technologies...
Follow RTT