The ODP Corp. has announced that its board of directors has determined to delay a previously announced public company separation to evaluate a potential sale of its consumer business, which includes the Office Depot division, as an undisclosed third party followed Staple’s parent company in making a bid.
In May 2021, the ODP announced that the board unanimously approved a plan to separate the company into two independent, publicly-traded companies by means of a tax-free spin-off to ODP shareholders. In November 2021, USR Parent, the parent company of Staples and a portfolio company of Sycamore Partners, reaffirmed a non-binding proposal to acquire ODP’s consumer business, including the Office Depot and OfficeMax retail stores business, the company’s direct channel business, officedepot.com, and Office Depot and OfficeMax intellectual property, including all brand names, for $1 billion in cash. ODP stated that it remains in conversation with Sycamore as the company further evaluates the potential value and regulatory risk of Sycamore’s proposed transaction.
In December 2021, ODP noted that its board received a non-binding proposal from another third party to acquire the company’s consumer business. The terms of that proposal have not been made public.
Although it had been focused on completing the public company separation during the first half of 2022, ODP has determined to delay further work on the separation in order to avoid incurring potentially unnecessary separation costs while it focuses on a potential sale of the consumer business, it maintained.
“We look forward to further evaluating the potential sale of ODP’s consumer business to determine whether a sale may provide greater value for our shareholders than a public company separation,” said Gerry Smith, ODP CEO. “If the consumer business is not sold, then ODP’s board of directors will reevaluate the advisability and timing of the public company separation.”
