Staples to buy Corporate Express for $2.6 billion

LONDON (MarketWatch) - After three failed bids, Staples on Wednesday won the support of Corporate Express with a $2.6 billion offer for the Dutch office-supplies group. Staples (SPLS: Staples Inc News, chart, profile, more Last: 23.15-0.06-0.26% 4:00pm 06/10/2008 Delayed quote data Add to portfolio Analyst Create alert Insider Discuss Financials Sponsored by: SPLS 23.15, -0.06, -0.3%) said it's going to pay 9.25 euros ($14.30) in cash for each share of Corporate Express (CXP: CXP News, chart, profile, more Last: Delayed quote data Add to portfolio Analyst Create alert Insider Discuss Financials Sponsored by: CXP, , ) (NL:85286: news, chart, profile) , a bid that values the company at 1.66 billion euros ($2.6 billion). Including assumed debt, the deal value is 3.1 billion euros. Corporate Express, meanwhile, said it's going to withdraw its 1.7-billion-euro bid for closely held French peer Lyreco, a bid the Dutch firm had said less than a month ago was "the most logical and compelling merger one could envision in our industry." Corporate Express will pay Lyreco a 30-million-euro breakup fee. Corporate Express Chief Executive Peter Ventress sang a different tune on Wednesday, saying "this offer is a good one for our shareholders and we recommend it wholeheartedly." Chart of NL:85286 Staples had bid 7.25 euros for Corporate Express in February and has lifted its offer twice since then. The more recent 9.15-euros-a-share offer brought Corporate Express to the bargaining table. Ventress is going to head up Staples operations outside the U.S. and Canada, reporting to Staples CEO Ron Sargent. Staples said the deal will establish a contract delivery business for Staples in Europe and Canada and help its North American delivery business, which is currently its fastest growing and most profitable business unit. Staples also will extend its reach into Australia and New Zealand. Corporate Express said the European contract business will still be headquartered in Amsterdam and that no "material" reductions will be made to the overall workforce. Shareholders won't be able to vote on the Lyreco deal during the June 18 special meeting. Deutsche Bank and J.P. Morgan advised Corporate Express, with ABN Amro advising Corporate Express's supervisory board. Lehman Brothers advised Staples, while Rothschild advised Lyreco. End of Story Steve Goldstein is MarketWatch's London bureau chief.