Office Depot, Inc. (NYSE: ODP), a leading global provider of office supplies and services, announced that on Friday it filed a presentation with the U.S. Securities and Exchange Commission (SEC) demonstrating the importance of shareholders electing the Board’s nominees at the Company’s Annual Meeting on August 21.
In the presentation, Office Depot noted that the election of the Board’s nominees will ensure their continued oversight of the Company’s progress on its multi-year strategic plan to improve operations at Office Depot and achieve the substantial synergies and value creation opportunities of the OfficeMax and Office Depot de Mexico transactions. Office Depot also highlighted the unique qualifications of its Board nominees in executing on these long-term initiatives and completing the integration process with OfficeMax for an expected successful closing by the end of 2013. The Company emphasized the particular importance its nominees’ qualifications, as removing some of these Board members could cause significant delays to the integration process, which is already well underway, and the realization of the merger’s significant value for shareholders. Each month of delay in successful integration represents approximately $12 million in lost potential synergies for the combined Company and thus all Office Depot shareholders.
Starboard Value LP has spent the last nine months boasting to the Company and its investors about an alternative plan, finally unveiling it three days ago -- just a few weeks before the Company’s important election of directors, at a time when there is a clear need for efficient and focused execution of the merger process. Starboard’s recently filed presentation discloses a “plan” that is not only deeply flawed, but threatens to undo much of the core operational improvements put in place by the Company. Further, it poses massive risk to the proposed merger of equals with OfficeMax, specifically in terms of integration planning and the CEO search. For example, Starboard proposes cutting over 60 percent of the Company's IT budget and 50 percent of the Company’s Finance budget, severely impacting daily business operations. These are the kinds of ideas that would significantly set back the business and destroy much of the value inherent in the merger.