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News Release

Staples, Inc. Announces Cash Tender Offer and Consent Solicitation for its 4.375% Notes Due 2023

FRAMINGHAM, Mass.--(BUSINESS WIRE)--Jul. 31, 2017-- Staples, Inc. (NASDAQ: SPLS) (“Staples” or the “Company”) today announced that it has commenced a tender offer to purchase for cash any and all of its $500 million aggregate principal amount of outstanding 4.375% Senior Notes due 2023 (the “Notes”). In conjunction with the tender offer, the Company is soliciting consents to the adoption of certain proposed amendments to the terms of the Notes as described below (the “Proposed Amendments”).

The pricing terms for the tender offer and the consent solicitation are set forth below.

                       
CUSIP No. ISIN

Outstanding
Principal
Amount

Title of Security

Purchase
Price(1)(2)

Consent
Payment(1)(2)

Total
Consideration(1)

 
855030AM4 US855030AM47 $ 500,000,000

4.375% Senior
Notes due 2023

$ 982.50 $ 30.00 $ 1,012.50
 
(1)     Per $1,000 principal amount of Notes and excluding accrued and unpaid interest, which will be paid in addition to the Total Consideration or Purchase Price, as applicable, up to, but not including, the Settlement Date (as defined below).
(2) Included in Total Consideration.
 

The tender offer will expire at 11:59 p.m., New York City time, on August 25, 2017, unless extended by the Company (such time and date, as the same may be extended, the “Expiration Date”). Holders must validly tender (and not validly withdraw) their Notes and validly deliver (and not validly revoke) their corresponding consents at or prior to 5:00 p.m., New York City time, on August 11, 2017, unless extended by the Company (such time and date, as the same may be extended, the “Consent Time”), to be eligible to receive the Total Consideration. Holders who tender their Notes after the Consent Time but on or prior to the Expiration Date will be eligible to receive the Purchase Price, but not the Consent Payment. In addition to the Total Consideration or Purchase Price, as applicable, holders who validly tender Notes will receive accrued and unpaid interest up to, but not including, the Settlement Date, which we expect to coincide with the closing of the Merger as described below.

Tendered Notes may be withdrawn and consents may be revoked prior to the earlier of (1) 5:00 p.m., New York City time, on August 11, 2017 or (2) such time and date as the Company receives the requisite consents and executes the Supplemental Indenture (as defined below) (such time and date, as the same may be extended, the “Withdrawal Deadline”) but may not thereafter be withdrawn or revoked. Holders may not tender their Notes without delivering the corresponding consent and may not consent without tendering their Notes. The Company retains the right to extend the Expiration Date and, consequently, the Acceptance Date (as defined below) and the Settlement Date, for any reason at its option, and expects to extend the Expiration Date so that the Settlement Date coincides with the closing of the Merger (as defined below), in each case without extending the Withdrawal Deadline.

The Company will, promptly following the Expiration Date, accept for purchase all Notes validly tendered (and not validly withdrawn) on or prior to the Expiration Date (the “Acceptance Date”). Payment of the Total Consideration or the Purchase Price, as applicable, for Notes so accepted for purchase will be made by the Company promptly after the Acceptance Date (the “Settlement Date”).

The Company is conducting the tender offer and the consent solicitation in connection with the Agreement and Plan of Merger, dated as of June 28, 2017 (the “Merger Agreement”), by and among Staples, Arch Parent Inc., a Delaware corporation (“Parent”), and Arch Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will be merged with and into Staples with Staples continuing as the surviving corporation (such transaction, the “Merger”).

Under the terms of the Notes, the closing of the Merger may result in a Change of Control Triggering Event (as defined in the Notes), which may require the Company to make a Change of Control Offer (as defined in the Notes). The Company is soliciting consents from the holders to amend the definition of “Change of Control” in the Notes so that the Merger may not constitute a “Change of Control” or result in a “Change of Control Triggering Event” under the Notes and to make certain other related changes to the Notes. Subject to the receipt of consents from holders of not less than a majority of the Notes, the adoption of the Proposed Amendments will ensure that the Company is not required to make a Change of Control Offer at a price equal to 101% of par to holders that do not validly tender their Notes as a result of the Merger. The Proposed Amendments will be effected by a supplemental indenture (the “Supplemental Indenture”), to be executed at such time as the Company has received the requisite consents and will become operative at such time as the conditions precedent to the consent solicitation have been satisfied or waived, which includes, among other things, the purchase of the Notes on the Settlement Date.

The tender offer and the solicitation are subject to the satisfaction of certain conditions, including the consummation of the Merger. The Company anticipates that the Merger will be completed in 2017 but there can be no assurance that the Merger will be completed in a timely manner, or at all. Adoption of the Proposed Amendments is not a condition to the consummation of the Merger.

The Company has retained BofA Merrill Lunch and Deutsche Bank Securities to act as Dealer Managers and Solicitation Agents (the “Dealer Managers and Solicitation Agents”) in connection with the tender offer and the solicitation. Questions regarding the tender offer may be directed to BofA Merrill Lynch at 888.292.0070 (toll-free) or 980.388.3646 (collect) or Deutsche Bank Securities at (866) 627 0391 (toll-free) or (212) 250-2955 (collect). Documents relating to the tender offer and solicitation may be obtained by contacting D.F. King & Co., Inc. at (800) 870-0126 (toll-free) or by email at stpls@dfking.com.

None of the Company, the Dealer Managers and Solicitation Agents, the information agent and tender agent or any of their respective affiliates, is making any recommendation as to whether holders should tender any Notes in response to the tender offer or provide the related consents in the consent solicitation. Holders of Notes must make their own decision as to whether to tender any of their Notes and, if so, the principal amount of Notes to tender, or to provide the related consents in the consent solicitation. This announcement is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful. The tender offer is being made solely by means of the Offer to Purchase and Consent Solicitation Statement. In those jurisdictions where the securities, blue sky or other laws require any tender offer to be made by a licensed broker or dealer, the tender offer will be deemed to be made on behalf of the Company by the Dealer Managers or one or more registered brokers or dealers licensed under the laws of such jurisdiction.

About Staples, Inc.
Staples brings technology and people together in innovative ways to consistently deliver products, services and expertise that elevate and delight customers. Staples is in business with businesses and is passionate about empowering people to become true professionals at work. Headquartered outside of Boston, Mass., Staples, Inc. operates primarily in North America.

Safe Harbor for Forward-Looking Statements

Statements in this news release regarding the tender offer and consent solicitation, the proposed Merger, the expected timetable for completing the Merger, future financial and operating results, future opportunities for the combined company and any other statements about Parent’s and our management’s future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” estimates and similar expressions) should also be considered to be forward-looking statements, although not all forward-looking statements contain these identifying words. Readers should not place undue reliance on these forward-looking statements. The Company’s actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which the Company may not be able to predict and may not be within the Company’s control. Factors that could cause such differences include, but are not limited to, (i) the risk that the proposed Merger may not be completed in a timely manner, or at all, which may adversely affect the Company’s business, (ii) the failure to satisfy all of the closing conditions of the proposed Merger, including the adoption of the Merger Agreement by the Company’s stockholders and the receipt of certain governmental and regulatory approvals in the U.S. and in foreign jurisdictions, (iii) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, (iv) the effect of the announcement or pendency of the proposed Merger on the Company’s business, operating results, and relationships with customers, suppliers, competitors and others, (v) risks that the proposed Merger may disrupt the Company’s current plans and business operations, (vi) potential difficulties retaining employees as a result of the proposed Merger, (vii) risks related to the diverting of management’s attention from the Company’s ongoing business operations, and (viii) the outcome of any legal proceedings that may be instituted against the Company related to the Merger Agreement or the proposed Merger. There are a number of important, additional factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the factors described in the Company’s Annual Report on Form 10-K for the year ended January 28, 2017 and its most recent quarterly report filed with the SEC. The Company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date hereof.

Source: Staples, Inc.

Staples, Inc.
Media Contacts:
Bill Durling, 508-253-2882
William.Durling@staples.com
or
Investor Contact:
Scott Tilghman, 508-253-1487
Scott.Tilghman@staples.com