Reuters, Published July 10 2013
OfficeMax shareholders approve merger with Office DepotOfficeMax Inc shareholders voted to approve its merger with larger rival Office Depot Inc, removing a key hurdle to the deal that would combine the No. 2 and No. 3 U.S. office supply retailers.
Office Depot stockholders also gave their nod on Wednesday to issue the company's shares to OfficeMax shareholders following the merger.
The two companies await regulatory approval for the merger aimed at cutting costs and boosting their clout with suppliers.
Boca Raton, Florida-based Office Depot revealed plans to buy Naperville, Illinois-based OfficeMax in February in an all-stock deal worth $976 million.
The companies have not decided on the combined entity's name, headquarters or chief executive.
Both companies, which trail industry leader Staples Inc in terms of market share, are under pressure from investors to boost profitability as well as shareholder value.
Office supply retailers, often seen as a barometer of economic health, have suffered as demand for their products fell after the recent U.S. recession.
They also face strong competition from Amazon.com Inc and Wal-Mart Stores Inc in selling everything from pens and notebooks to furniture to government, businesses and individuals.
The thumbs-up came even as Office Depot's top investor Starboard Value looks to get four new faces including the investment firm's CEO on Office Depot's board.
Starboard has cited the lack of retail experience among current board members of Office Depot and stressed the need to reconstitute the board whether or not the proposed merger takes place. Still, the largest shareholder of Office Depot has been in support of the merger.
Office Depot shares were down 1.6 percent at $4.16 on the New York Stock Exchange on Wednesday. OfficeMax shares were down 2 percent at $10.96.