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Staples Once More A Focus Of M&A Chatter; Report Jolts Stock

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Staples Once More A Focus Of M&A Chatter; Report Jolts Stock

Shares of Staples, Inc. (NASDAQ: SPLS) gained 7 percent early Thursday morning on chatter that the company is targeted for an acquisition.

Sycamore Partners, a private equity giant, is reportedly in advanced talks to acquire the office supply retailer, Reuters reported. The deal could value Staples at more than $6 billion, a premium to Staples' valuation of $5.60 billion as of Wednesday's market close.

As a private company under Sycamore's umbrella, Staples may be in a better position to shift its business model from serving consumers to targeting businesses, Reuters' sources added. A deal could be announced as soon as next week even though negotiation talks remain ongoing.

Sycamore is known to specialize in retail investments and is said to have prevailed over another private equity firm in bidding for Staples.

From From Its First Foray In The M&A Arena

Staples came under pressure from activist investor Starboard Value in 2015 to merger with rival office supply retailer Office Depot Inc (NASDAQ: ODP). A deal was put in place but ultimately rejected in mid-2016, which was viewed at the time as being a "real big setback for both companies."

Since the rejected merger at least one analyst felt that a new deal to acquire Staples would give a strategic buyer access to the company's "much more stable and defensible" North American Delivery segment and a healthy free cash flow generating retailer.

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Staples' Mediocre-At-Best Q1

25 Stocks Moving In Thursday's Pre-Market Session
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Posted-In: activist investor retailers Reuters StaplesM&A Rumors Movers Media Best of Benzinga

 

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