Office Depot, Inc. (NYSE: ODP), a leading global provider of office supplies and services, today announced that negotiations it initiated to reach a good-faith compromise with its largest shareholder, Starboard Value LP (together with its affiliates, "Starboard"), ahead of the Company’s Annual Meeting of Shareholders on August 21, have not resulted in an agreement.
Office Depot initiated the negotiations late last week after hearing from its shareholders that they were supportive of adding new perspectives to the Company's Board. After negotiating through the weekend and through late last night, Office Depot proposed a settlement agreement whereby two of the current Office Depot directors would have resigned, and the three Starboard nominees recommended by ISS and Glass Lewis - Cynthia Jamison, Jeffrey Smith and Joseph Vassalluzzo - would have been added to the Company's Board.
As part of the settlement offer, the Company also offered to invite Mr. Vassalluzzo to join the CEO Selection Committee in the search process for the CEO of the combined company, replacing one of the current directors, and to have both Mr. Smith and Mr. Vassalluzzo serve as two of Office Depot’s five continuing directors should the merger with OfficeMax be completed. Office Depot further proposed that any decision on the remaining three Company directors to be added to the post-merger Board would only be made after the Starboard nominees were on the Board and with the full Board’s participation. Notwithstanding all of these terms offered to Starboard, Starboard refused to settle.
Accordingly, Office Depot is urging all shareholders to protect the future of their investment by voting the WHITE proxy card FOR the Company's ten Board nominees.“Today's extremely disappointing outcome should serve as a warning call for all investors,” said Neil Austrian, Chairman and CEO of Office Depot. “After listening to our shareholders, we put forward what we viewed as an attractive offer that was not only responsive to them, but to Starboard's demands for a voice in the Boardroom and participation in the merger integration process. Yet, despite all of its proclamations about wanting to ensure the merger is completed successfully and overseen by the best possible directors, Starboard continued to make demands that ultimately ran contrary to that goal.