After Listening to Shareholders, Office Depot Offered Starboard Three
Seats on its Existing Board, One Seat on the CEO Selection Committee and
Two Seats on the Post-Merger Company's Board in an Effort to Reach a
BOCA RATON, Fla.--(BUSINESS WIRE)--Aug. 20, 2013--
Office Depot, Inc. (NYSE: ODP), a leading global provider of office
supplies and services, today announced that negotiations it
initiated to reach a good-faith compromise with its largest shareholder,
Starboard Value LP (together with its affiliates, "Starboard"), ahead of
the Company’s Annual Meeting of Shareholders on August 21, have not
resulted in an agreement.
Office Depot initiated the negotiations late last week after hearing
from its shareholders that they were supportive of adding new
perspectives to the Company's Board. After negotiating through the
weekend and through late last night, Office Depot proposed a settlement
agreement whereby two of the current Office Depot directors would have
resigned, and the three Starboard nominees recommended by ISS and Glass
Lewis - Cynthia Jamison, Jeffrey Smith and Joseph Vassalluzzo - would
have been added to the Company's Board.
As part of the settlement offer, the Company also offered to invite Mr.
Vassalluzzo to join the CEO Selection Committee in the search process
for the CEO of the combined company, replacing one of the current
directors, and to have both Mr. Smith and Mr. Vassalluzzo serve as two
of Office Depot’s five continuing directors should the merger with
OfficeMax be completed. Office Depot further proposed that any decision
on the remaining three Company directors to be added to the post-merger
Board would only be made after the Starboard nominees were on the Board
and with the full Board’s participation. Notwithstanding all of these
terms offered to Starboard, Starboard refused to settle.
Accordingly, Office Depot is urging all shareholders to protect the
future of their investment by voting the WHITE proxy card FOR the
Company's ten Board nominees.
“Today's extremely disappointing outcome should serve as a warning call
for all investors,” said Neil Austrian, Chairman and CEO of Office
Depot. “After listening to our shareholders, we put forward what we
viewed as an attractive offer that was not only responsive to them, but
to Starboard's demands for a voice in the Boardroom and participation in
the merger integration process. Yet, despite all of its proclamations
about wanting to ensure the merger is completed successfully and
overseen by the best possible directors, Starboard continued to make
demands that ultimately ran contrary to that goal.
"For the past few years, the Office Depot Board has worked extremely
hard to set a new strategic course for the Company, which led to the
agreement earlier this year for our planned merger with OfficeMax. This
Board has remained steadfastly dedicated to protecting shareholders’
investments and seeing the merger completed and integrated in the right
way - right down to the offer we made to Starboard this weekend. In the
timing and substance of its response to our offer, we believe that
Starboard has put its own interests ahead of Office Depot’s shareholders
and clearly demonstrated that it is not seriously interested in a
settlement. We urge all Office Depot shareholders to vote the WHITE
proxy card today.”
Consistent with its previous announcement and in response to shareholder
preference, Office Depot confirmed that if Thomas Colligan, an essential
member of the current CEO Selection Committee, is re-elected at the
annual meeting, Office Depot will commit to adding to the Board the
three Starboard nominees recommended by ISS and Glass Lewis. Office
Depot also would invite Mr. Vassalluzzo to join the CEO Selection
Committee and commit to adding at least one Starboard nominee to the go
forward board of the newly combined company if the merger with OfficeMax
closes. Office Depot urges all shareholders to vote the WHITE proxy card
Shareholders who need assistance in voting or who have questions about
the annual meeting may call the Company’s proxy solicitor toll-free at
About Office Depot
Office Depot provides core office supplies, the latest technology,
school essentials, copy
& print services, cleaning & breakroom products, and furniture
to consumers, teachers and businesses of all sizes through 1,614
stores, global e-commerce operations, a dedicated sales force, an
inside sales organization, and top-rated catalogs. The Company has
annual sales of approximately $10.7 billion, employs about 38,000
associates, and serves customers in 60 countries around the world.
Office Depot’s common stock is listed on the New York Stock Exchange
under the symbol ODP. Additional press information can be found at: http://news.officedepot.com.
IMPORTANT INFORMATION HAS BEEN AND WILL BE
FILED WITH THE SEC
In connection with the solicitation of proxies for Office Depot’s Annual
Meeting of Shareholders (the “2013 Annual Meeting”), Office Depot has
filed with the Securities and Exchange Commission (the “SEC”) a
definitive proxy statement concerning the proposals to be presented at
the 2013 Annual Meeting. The proxy statement contains important
information about Office Depot and the 2013 Annual Meeting. Office Depot
and its directors, executive officers and certain employees may be
deemed to be participants in the solicitation of proxies from Office
Depot’s shareholders in connection with the election of directors and
other matters to be proposed at the 2013 Annual Meeting. Information
regarding the interests, if any, of these directors, executive officers
and specified employees is included in the definitive proxy statement
and other proxy materials (the “Proxy Materials”) filed by Office Depot
with the SEC on July 19, 2013. On July 22, 2013, Office Depot mailed the
Proxy Materials to shareholders of record as of July 11, 2013. Investors
and shareholders are able to obtain free copies of the Proxy Materials
and other documents filed with the SEC by Office Depot through the
website maintained by the SEC at www.sec.gov.
In addition, investors and shareholders are able to obtain free copies
of the Proxy Materials and other documents filed by Office Depot with
the SEC by contacting Office Depot Investor Relations at 6600 North
Military Trail, Boca Raton, FL 33496, or by calling 561-438-7878.
OFFICE DEPOT SAFE HARBOR STATEMENT
This communication may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
concerning Office Depot, the merger and other transactions contemplated
by the merger agreement, and the outcome of the 2013 Annual Meeting.
These statements or disclosures may discuss goals, intentions and
expectations as to future trends, plans, events, results of operations
or financial condition, or state other information relating to Office
Depot, based on current beliefs of management as well as 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,” “intend,” “may,” “possible,” “potential,”
“predict,” “project” or other similar words, phrases or expressions.
These forward-looking statements are subject to various risks and
uncertainties, many of which are outside of Office Depot’s control.
Therefore, investors and shareholders 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 adverse
regulatory decisions; failure to satisfy other closing conditions with
respect to the merger; the risks that the new businesses will not be
integrated successfully or that Office Depot will not realize estimated
cost savings and synergies; Office Depot’s ability to maintain its
current long-term credit rating; unanticipated changes in the markets
for its business segments; unanticipated downturns in business
relationships with customers or their purchases from Office Depot;
competitive pressures on Office Depot’s sales and pricing; increases in
the cost of material, energy and other production costs, or unexpected
costs that cannot be recouped in product pricing; the introduction of
competing technologies; unexpected technical or marketing difficulties;
unexpected claims, charges, litigation or dispute resolutions; new laws
and governmental regulations. The foregoing list of factors is not
exhaustive. Investors and shareholders should carefully consider the
foregoing factors and the other risks and uncertainties that affect
Office Depot’s business described in its Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other
documents filed from time to time with the SEC. Office Depot does not
assume any obligation to update these forward-looking statements.
Source: Office Depot, Inc.
Office Depot, Inc.
Brian Levine, 561-438-2895