STAPLES VOTES TO GO PRIVATE
$6.9B deal expected to close in October
Staples Inc. stockholders yesterday overwhelmingly approved the proposed $6.9 billion sale of the nation’s No. 1 office supplies chain to New York private equity firm Sycamore Partners, but rejected “golden parachute” compensation for top Staples executives.
The vote on the leveraged buyout by Sycamore, which specializes in retail and consumer investments, was the last hurdle that had to be cleared before closure of the deal, which is expected by the end of October.
Stockholders controlling more than 473.4 million Staples shares voted in favor of the sale, while holders of more than 19.39 million shares voted against it, according to a U.S. Securities and Exchange Commission filing.
The pending deal with Sycamore, which would take Staples private, follows Staples’ May 2016 decision to abandon plans for a $6.3 billion merger with rival Office Depot Inc., after a federal judge ordered a temporary halt to the transaction to allow for a Federal Trade Commission review. Staples’ board supported the Sycamore deal, announced in June, amid company sales declines in four of the last five fiscal years.
Framingham-based Staples has been struggling with decreasing office products sales, the ongoing shift to online sales, and increased competition from Amazon.com and big-box chains like Walmart and Target.
Once Sycamore closes the Staples deal, it expects to separate the chain’s U.S. and Canadian retail businesses, including Staples.ca, into two separate Sycamore-affiliated entities that would be independently managed, according to SEC filings. The surviving Staples would consist solely of its remaining North American business-to-business delivery division.
Staples had no comment on the retail spinoff yesterday.
“We previously announced during our fourth-quarter/year-end 2017 results we’d be closing up to 70 stores, and that plan remains on track,” spokesman Mark Cautela said.
Staples’ shareholder proposal to approve golden parachute compensation related to executive officers’ potential required excise tax payments was a nonbinding advisory vote. The Staples board supported the proposal so the company could retain the executives — including CEO Shira Goodman, CFO Christine Komola and corporate controller Mark Conte — through the sale’s closing and not create an incentive for them to resign immediately following, according to the company’s proxy statement filed with the SEC.
But stockholders controlling more than 329 million Staples shares voted against the proposal, while holders of more than 164.3 million shares voted in favor.