NEW YORK (TheStreet) -- Office Depot (ODP) shares are down 2.41% to $8.89 in trading on Wednesday as investors reacted negatively to a federal judge blocking two different companies from merging.
On Tuesday a federal judge blocked food distributor Sysco Corp's (SYY) $3.5 billion acquisition of US Foods on grounds that the merger would reduce competition and in turn raise prices.
Office Depot shareholders recently approved a $6 billion merger with Staples (SPLS) but the deal is still subject to regulatory approval.
Office Depot and Staples are the country's two largest office supply retailers and regulators previously blocked the companies from merging in 1997.
If the merger is approved, Office Depot shareholders will get $7.25 per share in cash and 0.288 of a share in Staples stock for each share they own.
TheStreet Ratings team rates OFFICE DEPOT INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate OFFICE DEPOT INC (ODP) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins."