Staples stock jumps as judge criticizes FTC
Courtesy Staples
The ongoing saga of the $6.3 billion acquisition of Office Depot by Staples took an unexpected, and profitable, turn for Staples and its shareholders when the judge presiding over the lawsuit the Federal Trade Commission has taken out against the Framingham office supply store criticized the FTC’s handling of a key witness.
U.S. District Judge Emmet Sullivan criticized the FTC on Wednesday, saying that it attempted to “elicit false information from an Amazon.com Inc. executive,” according to a Bloomberg Business report citing court transcripts. The judge also said he wanted a closed-door session between the FTC and Amazon made public, according to the news service.
The judge’s remarks followed testimony from the vice president of Amazon’s business supply unit in which he testified that Amazon is not equipped to compete with the two established office supply stores for the large-scale corporate and government contracts that would be part of a $6.3 billion merger, according to news sources following the trial.
The FTC has since released a heavily redacted version of the interaction with Amazon. In that documentation, the government organization stated this kind of interaction with a witness is often necessary due to the complexity of declarations from witnesses.
But that release of the documents, and the FTC’s explanation, came after the stock market had a chance to respond to the judge’s comments, with Staples stock jumping in early morning trading Thursday to a high of 9.25 percent up at noon with the price dropping down in the afternoon to a 6 percent increase.
Staples and Office Depot have continued to maintain their argument that the proposed merger is the only way for the companies to continue amid increasing competition from multiple quarters. The two companies recently sold off $500 million in commercial contracts in an attempt to appease the FTC and those with concerns about the corporate and government contracts. Staples also recently reportedly cut “hundreds” of corporate jobs and reported a slump in 2015 sales figures.
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