Staples hopes to court Illinois supplier away from Atlanta merger

Photo/Grant Welker
Photo/Grant Welker
Staples' Framingham headquarters

Framingham office supply retailer Staples is urging the shareholders of an Illinois wholesaler of office furnishings to reject a merger with another office supply distributor.
In filing with the U.S. Securities and Exchange Commission, Staples said Illinois-based Essendant’s proposed merger with Atlanta-based S.P. Richards Co., a subsidiary of Genuine Parts Co., was inferior and could present significant antitrust risks that could delay or even block the transaction. 
In a letter to Essendant, Staples said it will send the company a proposed merger agreement Staples said won’t be subject to a financing condition.
Staples said its proposal includes a $20-million termination fee to Essendant if the deal doesn’t receive regulatory approval.
If Essendant’s transaction with S.P. Richards is blocked, Staples said the company’s stock (trading at $14.36 at Tuesday’s open) could fall to below $5.
Staples has been pursuing Essendant since April and wants to acquire the company’s outstanding stock for about $433.6 million at a per-share price of $11.50.
Staples said it is prepared to negotiate a possible increase in price for Essendant.
The S.P. Richards merger would include a one-time payment to Genuine Parts Co. of about $347 million.