Staples’ (SPLS) Revised Offer for Office Depot Rejected By The FTC

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Staples, Inc. (NASDAQ:SPLS), who had recently revised its offer to acquire Office Depot (NASDAQ:ODP) to $6.3 billion, received more bad news this morning from the Federal Trade Commission. The FTC has rejected their offer once more on ground that it is anti-competitive.

“The FTC rejected the company’s offer without making a counteroffer,” Staples said in a statement. “The company is still willing to continue negotiations with the FTC to reach a settlement that addresses FTC concerns.”

While supporters of the deal point to companies like Amazon.com who are clearly competing with retail chains for office supply sales, the FTC still beleives that the combination of these two companies would lead to higher prices for consumers and businesses alike. Shares of Office Depot (NASDAQ:ODP) are up 1.66% this morning on the news. The stock is trading higher by 2.80% or $0.26 hitting $9.56, despite the rather negative news. About 1.73 million shares traded hands. SPLS has declined 42.84% since May 18, 2015 and is downtrending. It has underperformed the S&P500 by 40.58%.

From a total of 6 analysts covering Staples Inc. (NASDAQ:SPLS) stock, 0 rate it a “Buy”, 1 a “Sell”, and 5 a “Hold”. This means that 0 of the ratings are positive. The highest target price is $18 while the lowest target price is $12. The mean of all analyst targets is $13 which is 35.98% above today’s ($9.56) stock price. Staples Inc. was the topic of 8 analyst reports since July 30, 2015 according to the firm StockzIntelligence Inc. Bank of America downgraded shares on December 11 to a “Underperform” rating. Telsey Advisory Group downgraded SPLS stock in a recent report from December 8 to a “Market Perform” rating. Finally, Citigroup maintained the stock with a “Neutral” rating in a report they issued on an August 24.

The institutional sentiment increased to 1.08 in Q2 2015. It’s up 0.27, from 0.81 in 2015Q2. The ratio is positive, as 45 funds sold all their Staples, Inc. shares they owned while 171 reduced their positions. 44 funds bought stakes while 190 increased their total positions. Institutions now own 538.03 million shares which is 9.41% less than the previous share count of 593.91 million in 2015Q2.

Oldfield Partners Llp holds 12.15% of its total portfolio in Staples, Inc., equating to 14.42 million shares. Hawkins Capital L.P. owns 1.20 million shares representing 6.57% of their total US portfolio. Moreover, Goodhaven Capital Management Llc has 4.68% of their total portfolio invested in the company, equating to 1.03 million shares. The New York-based Stelliam Investment Management Lp has a total of 2.85% of their portfolio invested in the stock. Pzena Investment Management Llc, a New York-based fund reported 25.50 million shares owned.

Staples, Inc. is a provider of products and services that serve the needs of business clients and consumers. The company has a market cap of $6.09 billion. The Firm offers a selection of products, such as Websites and mobile platforms, retail and online shopping and a range of copy and print and technology services. It has 210.39 P/E ratio. It operates in three business divisions: North American Stores & Online, North American Commercial and International Operations.

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