Amid FTC scrutiny, questions about Staples-Office Depot merger

staples

Federal trust busters continue to examine the proposed marriage of Staples and Office Depot, and the scrutiny has hurt shares of Boca Raton-based Office Depot.

A loss for shareholders could be a win for Palm Beach County’s economy. If the Federal Trade Commission approves the deal, the region would lose a Fortune 500 headquarters.

The Wall Street Journal reports today that the FTC’s slow decision has made the merger look less likely:

The antitrust review is continuing and the commission hasn’t yet decided whether to approve or challenge the merger, according to several other people familiar with the matter. The commission has until mid-October to decide, though that deadline could be extended if the companies give the FTC more time. …

Investors have lingering questions about whether the combination will pass muster. Office Depot shares are trading at a roughly 25% discount to the proposed deal price. Staples is offering to pay $7.25 in cash plus 0.2188 of its shares for each Office Depot share. The deal values Office Depot at about $10.35 a share versus its current price of $7.64.

Office Depot’s only comment about the increased scrutiny is a cryptic press release.

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