Report: Staples To Reject Office Depot Deal

Staples, Inc. SPLS will reject plea from 6 percent shareholder Starboard Value LP to combine with Office Depot Inc ODP, according to a Financial Times report Tuesday.

Staples tumbled recently by more than 5 percent to $16.46.

Office Depot dropped by about 4 percent to $7.67.

Citing unnamed "people familiar with the matter," the Financial Times said Staples will argue that its acquisition of the smaller Office Depot wouldn't pass muster with antitrust regulators.

The Federal Trade Commission blocked a merger of the two companies in 1997, but last year approved the combination of Office Depot with competitor Office Max.

Reports earlier Tuesday suggest that activist investor Starboard will soon release a letter to Staples saying that a failure to merge with Office Depot would be “a clear sign that significant leadership change is needed at Staples.”

Starboard last month disclosed its 6 percent stake in Staples along with a 10 percent stake in Office Depot.