The merging of Office Depot and OfficeMax that has been proposed by one of the company's largest and most aggressive investors would be logical, according to several stakeholders. According to Starboard Value LP, the business reorganization of the two rival stores would make sense. If the two giant store chains merge, some store locations could be closed, and the struggling companies' overall value and profit would be greater. Starboard is currently the largest shareholder in Office Depot with 14.8 percent of the company's stock.
Office Depot's stock plunged from a high of $44.46 per share in May 2006 to a recent low of $2.51. Starboard wants Office Depot to cut store size and amount of stock as well as advertising expenses and other costs. Office Depot has responded by creating a poison pill strategy that would give shareholders more stock when one shareholder acquires a 15 percent stake in the company without the approval of the board of directors.
Merging would help both companies by allowing them to streamline operations and consolidate their interests in a Mexican-based joint venture. A business transaction of this size could benefit from the oversight of business attorneys, particularly those with experience in large business transactions.
However, no matter how big or small the corporation, businesses may be able to benefit from the help of a business attorney. Business sales, mergers, acquisitions and other financial transactions must be carried out with the proper documentation and procedures. A business attorney can assist business owners in reaching their goals.
Source: Bloomberg Businessweek, "Office Depot-OfficeMax Deal Seen Rescuing Value: Real M&A," Tara Lachapelle and Brooke Sutherland, Nov. 6, 2012