Office supplies retailer Staples said it has made an offer to buy ODP Corp (NASDAQ:ODP), the owner of Office Depot, for US$2.1bn in cash after a previous bid in 2016 was blocked by US regulators.
Staples, which is owned by private equity firm Sycamore Partners, is offering US$40 per share for ODP, an 8.2% premium to the firm’s closing price last Friday, the last session before the offer was announced.
In an announcement confirming the approach on Monday, ODP said it is “carefully reviewing the proposal” to determine its course of action, although the company will be used to such approaches as this is the third such effort by Staples to acquire the retailer.
The 2016 attempt saw Staples offer to buy ODP for US$6.3bn, however, this was blocked by the US Federal Trade Commission (FTC) on the grounds that such a merger could reduce national competition for office supplies contracts.
Meanwhile, the first attempt, made back in 1996, was similarly stymied by the FTC after a lawsuit argued the merger would increase prices.
ODP acknowledged its past difficulties in getting merger proposals past regulators, saying that as part of its review it will be evaluating components of the bid “including potential antitrust and other regulatory challenges”.
However, following the growth of ecommerce giants such as Amazon.com Inc (NASDAQ:AMZN), which has amassed its own base of corporate customers, US regulators may feel now is the right time to allow the merger in an effort to challenge the corporation’s market power.
Shares in ODP were trading at US$44 in the after-hours session on Monday.