Did Staples' Board Sell Too Low? Multiple Law Firms Think So
A little less than a month ago, Staples' board of directors unanimously approved a sale to Sycamore Partners for $6.9 billion, and the dust seemed to be settling on the whole situation. But, because we are apparently masters of foreshadowing, our last words on the subject were "The story of Staples could be far from over." And, guess what, it looks like the story of Staples is far from over.
At least four law firms are reportedly contesting the acquisition, saying the office supply company's board of directors "may have violated their fiduciary duty in approving the deal," according to the Worcester Business Journal.
The law firm Kahn Swick & Foti (KSF) representing Louisiana Attorney General Charles C. Foti, told the Worcester Business Journal that it's investigating whether the acquisition, valued at $10.25 a share, is too low, compared to one analyst's estimated value of $12 per share.
"KSF is seeking to determine whether this consideration and the process that led to it are adequate," the law firm said.
Other law firms are investigating whether or not the company's board did its due diligence in looking for alternatives to Sycamore, thereby looking to get the best deal possible, rather than just the first deal.
At time of publication, Staples stock was at $10.10 per share. The company, in response to the accusations from law firms, encouraged all shareholders to vote in favor of the transaction.
Pending regulatory and stockholder approval, the deal should still close in December.
But, we'll say it again to be safe: The story of Staples could be far from over still.