Staples reportedly may spin off stores to Office Depot
Grant Welker
Staples has reportedly been in talks to have its retail business spun off to rival Office Depot.
Staples is in talks to spin off all of its retain locations to its office-supply rival Office Depot, The New York Post reported Monday, citing anonymous sources.
The report comes a month after Sycamore Partners announced its $6.9-billion bid for the Framingham office supply retailer, which is expected to close in December but is still subject to regulatory and stockholder approvals.
In early June, an unnamed bidder offered $625 million to $700 million for Staples' retail business, according to SEC filings. The Post said that bidder was Office Depot. Staples officials ended up approving the Sycamore purchase weeks later.
Sycamore, a New York-based private equity firm, is a willing seller of the retail side of Staples, The Post said. Office Depot, a Florida-based chain with about 1,400 locations, is the most logical buyer, citing what the Post called insiders. Office Depot merged with Office Max in 2013.
Staples and Office Depot attempted a $6.3-billion merger last year, but the deal ultimately fell apart. Earlier this year, Staples said it planned to close about 70 stores in North America this year after reporting a net loss of $615 million for 2016.
The purchase by Sycamore Partners would take the longtime public company private under the same ownership as a range of other retail brands, including Coldwater Creek, Hot Topic, Nine West, Talbots and The Limited.
Earlier this month, The Wall Street Journal reported Sycamore intends to split Staples in three to help fund the purchase. All three divisions - a United States division, a Canadian one and a third for its corporate-supply business - would remain under the same parent company, the Journal said, citing people familiar with the matter.
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