Shanghai Daily | 上海日报 -- English Window to China News

DUTCH office supplies distributor Corporate Express said yesterday it had agreed to a takeover bid from Staples Inc, reversing a plan to merge with a French competitor.

The boards of Corporate Express said they decided to endorse the Staples deal and recommend it to shareholders after the United States company raised its offer for the fourth time to 9.25 euros (US$14.36) a share.

Including Corporate Express debt, the offer values the company at about 3.1 billion euros (US$4.8 billion), Staples said.

Staples is the world's largest seller of office supplies on the basis of its strength as a retailer in the US market. Corporate Express is the largest distributor, selling only to companies.

Corporate Express had 2007 sales of 5.6 billion euros (US$8.8 billion), compared to US$19.4 billion for Staples.

Amsterdam-based Corporate Express said it has broken off a merger agreement with Lyreco of France. The French company is entitled to a 30 million euros break fee as a result. The Staples deal will be presented to Corporate Express shareholders for approval at a meeting on June 18.

Corporate Express shares rose 1.4 percent to 9.20 euros in early trading in Amsterdam.

Ron Sargent, chief executive of Massachusetts-based Staples said the takeover was a "win for customers, employees and shareholders."

It was certainly a win for Corporate Express shareholders. The company's stock had been trading near 4 euros in February when rumors of Staples' interest began circulating.

Staples' initial offer of 7.25 euros per share was later raised to 8 euros, and last month Corporate Express agreed to merge with Lyreco in what was seen as a dodge to either force a higher bid from Staples or evade the US company's embrace.

On June 3, Staples raised its bid to 9.15 euros, and two days later Corporate Express said they had entered talks.

Under Dutch rules, the 9.15-euro bid should have been the last offer Staples could make for Corporate Express this year, but the US firm found a loophole: by buying more than 1 percent of Corporate Express shares in a private transaction at 9.25 euros per share.

Staples' bid is still technically 9.15 euros, but under Dutch law the company will be obliged to pay shareholders 9.25 if the deal goes through.