Staples offers more for Corporate Express

By Lisa Kerner

Charlotte, N.C., May 13 - Staples, Inc. increased its offer for Corporate Express NV to €8.00 per ordinary share from €7.25, it was announced on Tuesday.

"Given the unwillingness of Corporate Express to negotiate a transaction, we will make our offer directly to shareholders," Staples chief executive officer Ron Sargent said in a company news release.

Sargent said Staples is offering certain cash value compared to the "considerable uncertainties" of Corporate Express' long-range guidance.

However, Corporate Express CEO Peter Ventress said his company has listened to Staples and considered its initial offer, which "significantly" undervalues the company. The statement was made in an 8-K filing with the Securities and Exchange Commission.

Staples expects to make an offer for both the Corporate Express depositary receipt of preference shares A and the 2% subordinated convertible bonds due 2010 issued by Corporate Express.

Despite what it calls Corporate Express' unwillingness to negotiate, Staples said it has moved forward with the proposed transaction, obtaining U.S. antitrust clearance and submitting information to regulatory agencies in Europe and Canada.

Staples added that the new offer price, when combined with the €0.21-per-ordinary share dividend already paid to shareholders, is a 90% premium over Corporate Express' closing price on Feb. 4, the day before offer rumors circulated.

On April 1, Staples announced a definitive $3 billion credit agreement with financing arranged by Lehman Brothers Inc., Bank of America and HSBC Bank USA that, along with Staples' cash reserves and revolving credit facility, will be used for the company's acquisition of Corporate Express.

In February, Corporate Express denied rumors that it was in discussions with Staples about a take-over. A few weeks later, Staples made an unsolicited €2.5 billion bid to acquire the company, which Corporate Express rejected.

Staples is an office superstore based in Framingham, Mass.

Corporate Express is a business-to-business office supply company based in Amsterdam.

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