Corporate Express shareholders (ASX: CXP) have been recommended to accept a takeover bid from US-based office supplies retailer, Staples.
The retailer has submitted an offer of $5.60 per share for all shares that Corporate Express does not currently own. Shareholders will also keep the final fully franked dividend of $0.125 per share, announced earlier this month.
The move by Staples values Corporate Express at approximately $1 billion on an equity basis.
The offer is subject to a number of conditions. Staples must end with a relevant interest of 90 per cent on a fully diluted basis. The offer must meet the approval of the Foreign Investment Review Board and Overseas Investment Office, and Corporate Express must not announce the intention to pay a dividend, any other form of distribution of profits or capital other than the $0.125 per share.
Finally, the All Ordinary Index must not fall and remain 20 per cent or more below the 16 March closing level of 4809 for three consecutive trading days.
In a statement to the ASX, Corporate Express chairman, Ian Pollard, said the chair was unanimous in recommending the acceptance of the takeover bid. Pollard was unavailable for further comment at time of press.
Staples is Corporate Expresses’ major shareholder globally. Although the retailer lacks an international IT focus, local IT division manager, Ahmed Latif, has previously claimed the reseller continues to increase its IT resources in Australia. Last year, the mid-market sector was highlighted as a major growth potential for Corporate Express.