Cerberus Capital Management has increased its bid for Staples. Last month, Staples turned down a $5.8 billion bid from the private equity firm.
The revised bid is reported to be more than $6 billion, lower than the $7 billion valuation. Cerberus already owns a controlling stake in Staples’ European business which has annual revenues of approximately $1.8 billion.
When news of the new offer from Cerberus broke mid last week, shares in Staples rose briefly to $9.59.
Meanwhile another bid from Sycamore Partners also remains on the table.
An agreement is expected imminently, however talks may still break down.
Last year in our article Will Staples Sell Off Its European Stores? we wrote how Cerberus has previously invested in troubled businesses. This includes billions of pounds worth of UK and Irish bank assets during the financial crisis in 2008.
Steady Staples Sales for Q1
Amidst these developments, Staples stated in May that Q1 sales fell 5% to $4.1 billion. Same store sales fell by 2.6%. There were declines in the sales of office supplies and inks and toners.
However, these were partially offset by growth in facility supplies, break room supplies and technology solutions.
Staples: Beyond Retail
Staples has also confirmed it is still on track to close around 70 stores in North America during 2017. It has also recently launched a new campaign, “Staples – It’s Pro Time”. The emphasis for this campaign is to look beyond retail and look towards a larger customer base. This includes SMBs and larger enterprises in addition to B2C consumers.
In taking this new approach, Staples is looking to emphasis its business to business services and expertise.