ODP had a $11 billion Market cap in 2007..OMX should take
them out at 2.5 Billion and add 12 billion in rev's to there bottom line,,,,and there biz model,,,it would pay for itself in a year or 2,,,,all for 9 bucks a share,,geez it was 9 bucks in april,,,take them out OMX
I have not said that I think it would be a bad idea, I simply responded that it is not likely to happen right now until they get their houses in order financially. The total OSS percent of Office Products business nationally is less than 10% so the concept that there is only room for two not three is disingenous. The issue is that one is run extremely well and the other two are struggling.
Frankly whether one likes Odaland or Schmidt or whomever, they have not been effective and if the board had the guts they would bite the bullet and bring in a world class guy to clean house. There are so many issues at ODP right now that only a new broom that sweeps clean could fix them. First and foremost is MORALE.
Don't put words in my mouth. I never said they could not be sold, I said that neither Depot nor Max could buy the other or even have a M.O.E. because of the restrictive covenants of the lenders. If Walmart offered 10 bucks a share I am not certain all the institutional investors would grab it, but they probably would based on the analysts estimates
Then you know that companies like OMX and ODP which over the past 3 years have huge net losses in profit and valuation with no silver bullet showing would have an incredibly difficult time renegotiating anything, especially when they already have their hands in their lenders pocket for hundreds of millions of dollars. IMO No bank in the world is going to let either of these companies spend a nickel on their own stock or renegotiate to fund even a M.O.E. with no cash needed because there is no reason to suspect that a combined company could make money.
I get why lenders have covenants but it's not to restrict mergers or acquisitions. It's to protect the lender's rights - to cut a better deal as well as to opt out. I've worked in corporate finance in publicly traded companies. Lines of credit are renegotiated all the time.
You need to do some research. Both ODP and OMX have codicils in their revolving lending agreements that prohibit buying back stock or merging with another company. It cant happen right now. Who is to say that OMX with a lower market cap would be the purchaser anyway?