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ODP Corp. Proposes Combining Retail And Consumer-facing Ecommerce Operations With Staples

ODP Corp. (ODP) said Tuesday its board of directors has carefully reviewed USR Parent Inc.'s or Staples proposal announced on January 11, 2021 to acquire ODP's entire issued and outstanding common stock for $40.00 per share in cash.

ODP added its board has unanimously concluded that there is a more compelling path forward to create value for the company as well as its shareholders than the potential transaction described in the Staples' proposal. The company's shares are losing almost 2 percent in pre-market activity.

Instead, ODP said it is open to combining its retail and consumer-facing ecommerce operations with Staples "under the right set of circumstances and on mutually acceptable terms."

In a letter to Stefan Kaluzny, Managing Director of Sycamore Partners and a Member of the Board of Directors of USR Parent, ODP Corp. noted that the acquisition proposal would expose ODP to material uncertainty, significant financial burden, and the risk of significant damage to ODP's business in the event regulatory approvals are noted obtained.

ODP said it is pursuing a comprehensive strategy that it believes can deliver significant value to its shareholders without introducing material regulatory risk. This includes building on its B2B strategy and other growth initiatives and moving forward with the process for the sale of CompuCom.

However, OPD added it is open to combining its retail and consumer-facing ecommerce operations with Staples. The options suggested by the company include a joint venture, or an acquisition by Staples of ODP's retail and consumer-facing ecommerce operations.

ODP noted that while both options require regulatory approval, it believes the regulatory risk of pursuing a retail-only transaction to be significantly lower than your proposed transaction.

"A transaction with you that is limited to our retail and consumer-facing and ecommerce business would eliminate the time, complexity and uncertainty created in your proposal by the need to identify a suitable third-party buyer willing to acquire the B2B Business on terms that would be mutually acceptable to our respective companies," ODP said in the letter.

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