Staples 2014 Annual Report Download - page 173
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APPENDIX C
STAPLES C-41
STAPLES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
NOTE R — SUBSEQUENT EVENT
Proposed acquisition of Office Depot
On February 4, 2015, the Company announced that it had
entered into a definitive agreement (the “Merger Agreement”)
under which it plans to acquire all of the outstanding shares of
Office Depot, a global supplier of office products, services and
solutions for the workplace. Under the terms of the agreement,
Office Depot shareholders will receive, for each Office Depot
share, $7.25 in cash and 0.2188 of a share in Staples stock
at the closing. Based on the number of outstanding shares
of the Company’s common stock and Office Depot common
stock as of February 2, 2015, and the closing share price of
the Company’s common stock on such date, the value of the
total consideration to be paid by Staples is estimated to be
approximately $6.3 billion, including approximately $4.1 billion
of cash and approximately 124.4 million shares of Staples
common stock.
The transaction is subject to customary closing conditions,
including antitrust regulatory clearances and Office Depot
shareholder approval. The Company intends to file a Form S-4
registration statement relating to the Company common stock
to be issued in the merger and the listing of such stock on
Nasdaq. Assuming such conditions are satisfied, the deal is
expected to close by the end of calendar year 2015.
The Merger Agreement contains termination rights for both the
Company and Office Depot. The Company would be required
to pay Office Depot a termination fee of $250 million under
certain circumstances, including if the Merger Agreement is
terminated as a result of the antitrust closing conditions (as
set forth in the Merger Agreement) not being satisfied on or
before November 4, 2015 (which date will be automatically
extended to February 4, 2016 if all other closing conditions
would otherwise have been satisfied). In addition, Office
Depot may be required to pay the Company a termination
fee of $185 million under certain circumstances, including if
Office Depot terminates the Merger Agreement to accept a
superior proposal.
In connection with the planned acquisition, Staples has
obtained financing commitments from Bank of America,
N.A. and Merrill, Lynch, Pierce, Fenner & Smith Incorporated
and Barclays Bank PLC for a $3 billion asset-based credit
facility and a $2.75 billion 6-year term loan. These sources
of financing, together with the Company’s cash reserves,
are expected to be sufficient to finance the acquisition. As a
result of the planned acquisition, the Company has temporarily
suspended its share repurchase program (see Note N Share
Repurchase Plan).