Office Depot, Inc. (“Office Depot” or the “Company”) (NASDAQ:
ODP), a leading provider of business services and supplies,
products and technology solutions, today announced that its Board
of Directors has adopted a limited duration shareholder rights plan
(the “Rights Plan”) and declared a dividend of one right (“Right”)
for each outstanding share of Company common stock as of the record
date. The record date for the dividend is May 21, 2020. The Rights
Plan expires, without any further action being required to be taken
by the Office Depot Board of Directors, on May 4, 2021.
In adopting the Rights Plan, Office Depot’s Board of Directors
has taken note of the substantial increase in market volatility and
uncertainty as a result of the COVID-19 pandemic, as well as its
impact on the Company’s stock price. Given the current
unprecedented environment caused by the pandemic, as well as the
importance of maintaining focus on the Company's operations,
safeguarding the welfare of its employees and serving its
customers, the Board of Directors believes adopting the Rights Plan
is in the best interests of the Company and its shareholders and
will contribute to the preservation of the Company’s long-term
value for its shareholders. The Rights Plan is similar to plans
adopted by other public companies, and is intended to promote the
fair and equal treatment of all Office Depot shareholders and to
allow shareholders to realize the long-term value of their
investment in Office Depot by guarding against opportunistic
efforts to capitalize on recent macroeconomic conditions, including
open market accumulations or other tactics, aimed at gaining
control of the Company without paying an appropriate control
premium to deliver sufficient value for all Company shareholders.
The Rights Plan will not prevent a takeover of the Company on terms
that the Board determines are favorable and fair to all
shareholders. It is designed to position the Board of Directors to
fulfill its fiduciary duties on behalf of all shareholders by
ensuring that the Board has sufficient time to make informed
judgments about any takeover attempts and to encourage anyone
seeking to gain a controlling interest in Office Depot to negotiate
prior to attempting a takeover. The Rights Plan does not deter the
Board of Directors from considering any offer that is fair to and
otherwise in the best interest of shareholders. The Rights Plan
applies equally to all current and future shareholders. The Rights
Plan has not been adopted in response to any specific takeover bid
or other proposal to acquire control of the Company.
Under the Rights Plan, the Rights will become exercisable if a
person or group acquires the beneficial ownership of 10% (or 20%
for certain passive investors) or more of the Company’s outstanding
common stock (including in the form of synthetic ownership through
derivative positions). In the event that the Rights become
exercisable, each Right will entitle its holder to purchase, at the
Right’s exercise price, a number of shares of common stock having a
market value of twice the Right’s exercise price. Rights held by
the triggering person will become void and will not be exercisable
to purchase shares at such exercise price. The Board of Directors
may, rather than permitting the exercise of the Rights, exchange
each Right (other than Rights held by the triggering person) for
one share of common stock, subject to adjustment as provided in the
Rights Plan. The Board of Directors will, prior to the Rights
becoming exercisable, in general be entitled to amend the Rights
Plan or to redeem the Rights for $0.001 per Right.
This announcement is a summary only and is qualified by
reference to the full text of the Rights Plan. Additional details
will be contained in a Current Report on Form 8-K and a
Registration Statement on Form 8-A to be filed by the Company with
the U.S. Securities and Exchange Commission.
About Office Depot, Inc.
Office Depot, Inc. (NASDAQ:ODP) is a leading provider of
business services and supplies, products and technology solutions
to small, medium and enterprise businesses, through a fully
integrated B2B distribution platform of approximately 1,300 stores,
online presence, and dedicated sales professionals and technicians.
Through its banner brands Office Depot®, OfficeMax®, CompuCom® and
Grand&Toy®, as well as others, the Company offers its customers
the tools and resources they need to focus on their passion of
starting, growing and running their business. For more information,
visit news.officedepot.com and follow @officedepot on Facebook,
Twitter and Instagram.
Office Depot is a trademark of The Office Club, Inc. OfficeMax
is a trademark of OMX, Inc. CompuCom is a trademark of CompuCom
Systems, Inc. Grand&Toy is a trademark of Grand & Toy, LLC
in Canada. ©2020 Office Depot, Inc. All rights reserved. Any other
product or company names mentioned herein are the trademarks of
their respective owners.
FORWARD LOOKING STATEMENTS
This communication may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements or disclosures may discuss goals, intentions
and expectations as to future trends, plans, events, results of
operations, cash flow or financial condition, the potential impacts
on our business due to the unknown severity and duration of the
COVID-19 outbreak, or state other information relating to, among
other things, Office Depot, based on current beliefs and
assumptions made by, and information currently available to,
management. Forward-looking statements generally will be
accompanied by words such as “anticipate,” “believe,” “plan,”
“could,” “estimate,” “expect,” “forecast,” “guidance,” “outlook,”
“intend,” “may,” “possible,” “potential,” “predict,” “project,”
“propose” or other similar words, phrases or expressions, or other
variations of such words. These forward-looking statements are
subject to various risks and uncertainties, many of which are
outside of Office Depot’s control. There can be no assurances that
Office Depot will realize these expectations or that these beliefs
will prove correct, and therefore investors and stakeholders should
not place undue reliance on such statements.
Factors that could cause actual results to differ materially
from those in the forward-looking statements include, among other
things, highly competitive office products market and failure to
differentiate Office Depot from other office supply resellers or
respond to decline in general office supplies sales or to shifting
consumer demands; competitive pressures on Office Depot’s sales and
pricing; the risk that Office Depot is unable to transform the
business into a service-driven company or that such a strategy will
not result in the benefits anticipated; the risk that Office Depot
may not be able to realize the anticipated benefits of acquisitions
due to unforeseen liabilities, future capital expenditures,
expenses, indebtedness and the unanticipated loss of key customers
or the inability to achieve expected revenues, synergies, cost
savings or financial performance; the risk that Office Depot is
unable to successfully maintain a relevant omni-channel experience
for its customers; the risk that Office Depot is unable to execute
the Business Acceleration Program successfully or that such program
will not result in the benefits anticipated; failure to effectively
manage Office Depot real estate portfolio; loss of business with
government entities, purchasing consortiums, and sole- or limited-
source distribution arrangements; failure to attract and retain
qualified personnel, including employees in stores, service
centers, distribution centers, field and corporate offices and
executive management, and the inability to keep supply of skills
and resources in balance with customer demand; failure to execute
effective advertising efforts and maintain the Office Depot
reputation and brand at a high level; disruptions in Office Depot
computer systems, including delivery of technology services; breach
of Office Depot information technology systems affecting
reputation, business partner and customer relationships and
operations and resulting in high costs; unanticipated downturns in
business relationships with customers or terms with the suppliers,
third-party vendors and business partners; disruption of global
sourcing activities, evolving foreign trade policy (including
tariffs imposed on certain foreign made goods); exclusive Office
Depot branded products are subject to additional product, supply
chain and legal risks; product safety and quality concerns of
manufacturers’ branded products and services and Office Depot
private branded products; covenants in the credit facility; a
downgrade in Office Depot credit ratings or a general disruption in
the credit markets; incurrence of significant impairment charges;
retained responsibility for liabilities of acquired companies;
fluctuation in quarterly operating results due to seasonality of
Office Depot business; changes in tax laws in jurisdictions where
Office Depot operates; increases in wage and benefit costs and
changes in labor regulations; changes in the regulatory
environment, legal compliance risks and violations of the U.S.
Foreign Corrupt Practices Act and other worldwide anti-bribery
laws; volatility in Office Depot common stock price; changes in or
the elimination of the payment of cash dividends on Office Depot
common stock; macroeconomic conditions such as future declines in
business or consumer spending; increases in fuel and other
commodity prices and the cost of material, energy and other
production costs, or unexpected costs that cannot be recouped in
product pricing; unexpected claims, charges, litigation, dispute
resolutions or settlement expenses; and catastrophic events,
including the impact of weather events on Office Depot’s business;
the discouragement of lawsuits by shareholders against Office Depot
and its directors and officers as a result of the exclusive forum
selection of the Court of Chancery, the federal district court for
the District of Delaware or other Delaware state courts by Office
Depot as the sole and exclusive forum for such lawsuits; and the
impact of the COVID-19 pandemic on our business, including on the
demand for our and our customers’ products and services, on trade
and transport restrictions and generally on our ability to
effectively manage the impacts of the COVID-19 pandemic on our
business operations. The foregoing list of factors is not
exhaustive. Investors and shareholders should carefully consider
the foregoing factors and the other risks and uncertainties
described in Office Depot’s Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, and Current Reports on Form 8-K filed with
the U.S. Securities and Exchange Commission. Office Depot does not
assume any obligation to update or revise any forward-looking
statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20200506005469/en/
Tim Perrott Investor Relations 561-438-4629
Tim.Perrott@officedepot.com Danny Jovic Media Relations
561-438-1594 Danny.Jovic@officedepot.com
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