FRAMINGHAM, Mass., June 4, 2021 /PRNewswire/ -- USR Parent, Inc.
("Staples") today said it had sent a letter to the Board of
Directors of The ODP Corporation (NASDAQ: ODP) outlining a
$1.0 billion or $18.27 per share proposal to acquire The ODP
Corporation's consumer business, including the Office Depot and
OfficeMax retail stores business, the Company's direct channel
business (officedepot.com), and the Office Depot and OfficeMax
intellectual property, including all brand names.
The letter has been filed and the full content is published
below:
USR Parent, Inc.
500 Staples Drive
Framingham, MA 01702
June 4, 2021
Board of Directors
The ODP Corporation
6600 North Military Trail
Boca Raton, FL 33496
Ladies and Gentlemen:
USR Parent, Inc. ("Staples") proposes to acquire the consumer
business of The ODP Corporation (together with its subsidiaries,
the "Company"), including the Office Depot and OfficeMax retail
stores business, the Company's direct channel business
(officedepot.com), and the Office Depot and OfficeMax intellectual
property, including all brand names (the "Consumer Business", which
we believe is substantially similar to the "remaining business" in
the Company's previously announced spinoff plan) for a cash
purchase price of $1.0 billion, or
approximately $18.27 for each
outstanding share of the Company's common stock.
Our proposal is a compelling value proposition for the Company's
shareholders, as the cash consideration of approximately
$18.27 per common share represents
approximately 43% of the 30 day average closing share price for the
Company of $43.21 as of June 2, 2021.
Staples' proposal also provides the Company with substantial
certainty that the parties will be able to consummate the proposed
transaction. Staples intends to provide the Company with customary
equity and debt financing commitment letters sufficient to provide
all required funding for the transaction, and Staples' obligation
to complete the transaction will not be conditioned on the receipt
of financing.
Moreover, as you know, in November
2020, Staples filed for the necessary governmental antitrust
approvals to acquire the Company, and has made substantial progress
responding to the governmental data and document requests issued in
connection therewith. With the Company's full cooperation, we are
confident that the parties will be able to expeditiously obtain the
necessary antitrust approvals for the proposed acquisition of the
Consumer Business.
Our Term Sheet for the proposed transaction (attached hereto)
sets forth additional detail with respect to the material terms and
conditions of our proposal.
We believe our proposal represents a compelling opportunity for
the Company and its shareholders. We look forward to working with
the Company to negotiate and sign the necessary definitive
agreements for the proposed transaction, and to proceed to closing
the transaction as soon as practicable.
We remind you of our intention to commence a tender offer for
all of the outstanding common shares of the Company unless our
negotiations for a consensual alternative transaction as proposed
herein are successful, and we reserve all rights in connection
therewith.
We look forward to discussing our proposal with you. If you have
any questions about our proposal, please contact our financial
advisor, Marco Valla, of
Barclays.
Sincerely,
USR Parent, Inc.
By:
|
_/s/ Stefan
Kaluzny_________________________
|
|
Stefan
Kaluzny
|
|
On behalf of USR
Parent Inc.'s Board of Directors
|
Exhibit
THE ODP CORPORATION - TERM
SHEET
The following outlines the material terms of the proposed
acquisition of the consumer business of The ODP Corporation by USR
Parent, Inc., which transaction is subject in all respects to
negotiations between the parties, and will not be binding upon
either party unless and until mutually agreeable definitive
documentation is executed and delivered.
Acquired
Business:
|
USR Parent, Inc.
and/or one or more of its affiliates ("Staples") will acquire (the
"Transaction") from The ODP Corporation (together with its
subsidiaries, the "Company") all assets primarily related to
(including owned and leased real estate), and all liabilities to
the extent related to, the Company's consumer business, including
the Office Depot and OfficeMax retail stores business, the
Company's direct channel business (officedepot.com), and the Office
Depot and OfficeMax intellectual property, including all brand
names (referred to herein as the "Consumer Business", and which we
believe is substantially similar to the "remaining business" in the
Company's previously announced spinoff plan).
|
Retained
Business:
|
The Company will
retain all assets and liabilities other than those that are part of
the Consumer Business, including, without limitation, the Company's
Business Solutions Division contract business (including Grand
& Toy and the Federation), CompuCom, the Company's B2B digital
platform technology business (including BuyerQuest), real estate
not primarily related to the Consumer Business (including the
Company's headquarters), and the Company's global sourcing office
and its other sourcing, supply chain and logistics assets
(collectively, the "Retained Business").
|
Purchase
Price:
|
The aggregate
purchase price for the Consumer Business will be $1.0 billion (the
"Purchase Price").
The Purchase Price
will be (i) payable in cash at the closing of the Transaction, (ii)
determined on a cash-free (excluding usual and ordinary levels of
store cash), debt-free basis, free from any non-ordinary course
liabilities and assuming a normalized level of working capital and
(iii) subject to a customary post-closing adjustment for cash,
indebtedness, non-ordinary course liabilities and working
capital.
|
Transaction
Structure:
|
The parties will work
in good faith to agree upon and implement a mutually acceptable
transaction structure (including the acquisition of the capital
stock of one or more of the Company's subsidiaries that conduct the
Consumer Business), taking into account tax impact on the parties,
allocation of assets and liabilities, ease of execution and other
relevant matters.
|
Regulatory
Matters:
|
Each of the Company
and Staples (on its own behalf and on behalf of any of its
affiliates conducting any portion of the Staples' consumer or B2B
businesses in the U.S. and Canada, and collectively referred to
herein as the "Staples Group") will use reasonable best efforts to
obtain all required regulatory approvals necessary to consummate
the Transaction.
|
Financing:
|
Staples intends to
provide the Company with customary equity and debt financing
commitment letters sufficient to provide all required funding for
the Transaction, and Staples' obligation to complete the
transaction will not be conditioned on the receipt of
financing.
|
Definitive
Purchase Agreement:
|
The definitive
purchase agreement for the Transaction will be prepared by counsel
to Staples and will include representations, warranties, covenants,
conditions and indemnities that are usual and customary for
transactions of this nature, it being understood that Staples will
bear all risk related to COVID-19 matters with respect to the
Consumer Business.
|
Commercial
Arrangements:
|
At the closing of the
Transaction, the parties and/or their respective affiliates will
enter into the following mutually agreed upon commercial
agreements: (i) a transition services agreement that will provide
each of the Consumer Business and the Retained Business with
stand-alone functionality on a post-closing basis (including for
matters such as supply chain services, buying agency services, IT
services, certain other general and administrative services, access
to certain of the other party's real estate, and other mutually
agreed upon services) for agreed upon periods of time at the
service provider's net cost to provide such services, and (ii) a
trademark license agreement to provide the Retained Business, at no
royalty, with the right to use the Office Depot and OfficeMax trade
names in an agreed upon field of use for an agreed upon term
following the closing.
|
About USR Parent, Inc.
USR Parent, Inc. supports
lifelong achievement for businesses and consumers however and
wherever they work and learn today. With more than 1,000 retail
locations, innovative brands and a product assortment for
businesses, entrepreneurs, educators and students, USR Parent, Inc.
provides customized solutions for continued professional and
personal growth. The company is headquartered in Framingham, Massachusetts.
This communication does not constitute an offer to buy or
solicitation of an offer to buy any securities. This communication
relates to a proposal that Staples has made for a business
combination transaction with The ODP Corporation. In furtherance of
this proposal and subject to future developments, Staples may file
one or more proxy statements, tender offer statements or other
documents with the Securities and Exchange Commission.
This communication is not a substitute for any proxy statement,
tender offer statement or other document Staples may file with the
SEC in connection with the proposed transaction. This document
shall not constitute the solicitation of an offer to buy any
securities of ODP.
Contacts
Steven
Lipin/Patricia Figueroa,
Gladstone Place Partners
212-230-5930
View original
content:http://www.prnewswire.com/news-releases/staples-proposes-to-acquire-the-odp-corporations-consumer-business-301306022.html
SOURCE Staples, Inc.