Activist investor Starboard Value LP on Thursday reported it had acquired a roughly 6% stake in Staples Inc. (SPLS) at the same time that it boosted its stake in Office Depot Inc. (ODP) to about 10% while people familiar with the hedge fund suggest that it's seeking to pressure the two companies to merge.
The insurgent's investment comes about a year after a $1.2 billion merger between Office Depot and OfficeMax Inc — one that received extension attention from antitrust authorities but ultimately was approved in November 2013 without divestitures. And Starboard was heavily involved with that merger — the fund pushed to put its candidates on the board at Office Depot, eventually settling for three board seats, including one for its founder, Jeff Smith. Smith also had a hand in recruiting Office Depot's CEO, Roland Smith, a former supermarket executive.
Starboard's founder stepped down from Office Depot's board in September.
If Starboard pushes for a combination, as expected, such a combination would also be a throwback to 1997 when the two companies tried to merge, but were blocked by the Federal Trade Commission. Still, as the Office Depot-OfficeMax deal illustrated, the competitive landscape is greatly altered, especially with competition from online retailers such as Amazon.com Inc. (AMZN) as well as big box stores including Costco Wholesale Corp. (COST) , Target Corp. (TGT) and Wal-Mart Stores Inc. (WMT) .