Office Depot Soars 17% Amid News Of Merger With Staples

Shares of Office Depot Inc ODP opened more than 17 percent higher Tuesday amid news that it may merge with Staples, Inc. SPLS.

The price and details of the transaction were not yet known, however, the companies were in “advanced talks to combine,” according to a Wall Street Journal report.

The report suggested that cost savings from a merger could double operating profits from the combined entity, which would be attractive to Starboard Value LP, who holds approximately 10 percent of Office Depot and 6 percent of Staples.

Analyst Brian Sozzi recently cited three reasons why a merger should be avoided. At the moment, however, investors appeared to be in favor of the idea.

Shares of Staples also opened higher and recently traded at $18.52, up 8 percent.

Office Depot recently traded at $8.93, up 17 percent.