OFFICE DEPOT INC 5.10 0.26 5.37% up 5% on SEC filing telegraphing possible sale or merger of Office Depot (ODP NYSE) as of 09:45 AM EST on 12/22/2010 in USD (NYSE Delay: 15 mins.)
Marketwires Stockwatch: Boca Raton, FL December 22, 2010 (Compiled by DRS market services and watches)
On December 21, 2010 Office Depot (ODP NYSE) filed an SEC 8K disclosing Change in Control (CIC) agreements with BSD President Steve Schmidt, and company officers Charlie Brown and Michael Newman. The CIC agreement may be foreshadowing of major changes in ownership and control at the beleaguered office supply company. With the departure of disgraced CEO Steve Odland after the company agreed to a $1 million dollar SEC investigation settlement and the continued loss of market share to rival industry leader Staples (SPLS NYSE), industry analysts have been opining that the only course to save the company would be a merger, buyout or piece-meal selling of assets. The sale of operations in Israel and Japan recently have done nothing to dampen the bleak out look that Depot’s only path to survival is through a buyout or merger. Compounding the problems facing a buyout or merger are the contingent liabilities associated with as many as 12 current ongoing federal and state fraud investigations into the companies government contracts and pricing. What is clear is that any change in ownership will be fraught with difficulties as the new ownership will have to navigate investigations, poor morale and uncertainty as to market direction. Even with the difficulties associated with these options, they may be the only choice left if Office Depot is to continue operations in any form in the coming years.