Essendant Confirms Receipt Of Two Acquisition Proposals
Essendant recently confirmed that it received an unsolicited proposal from Staples, Inc. to acquire all shares of the Essendant stock for $11.50 per share, in cash. Reportedly, the private-equity owner of Staples, Sycamore Partners, already owns 9.9 percent of Essendant.
According to PR Newswire, "on April 17, 2018, Staples communicated its initial proposal to Essendant, which Essendant declined after thorough review by its Board in consultation with its financial and legal advisors. Staples sent a revised proposal on April 29, 2018 stating that it believed it will be able to identify incremental value opportunities to enable it to increase its offer significantly in excess of $11.50 per share after receiving confidential information and engaging in discussions with Essendant. On May 4, 2018, in consultation with its financial and legal advisors, Essendant's Board determined that Staples' revised proposal is reasonably likely to lead to a "Superior Proposal" as defined in the merger agreement with Genuine Parts Company ("GPC"). There can be no assurance that the Staples proposal will result in a transaction."
This happened roughly one month after Genuine Parts Company entered into a merger agreement to combine Essendant and GPC’s S.P. Richards business in a deal valued at $680 million. Reports state that upon closing of the transaction, GPC shareholders will own approximately 51 percent and Essendant shareholders will own approximately 49 percent of the combined company.
PR Newswire states that "the merger agreement with GPC remains in effect, and the Essendant Board has not changed its recommendation that Essendant's shareholders vote in favor of that transaction."
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