Corporate Express Gets Mop Up Bid

  Corporate Express Australia has copped a & #36;1 billion mop up bid from its major shareholder, the Staples office supplies chain of the US.Staples controls 98.6 million of Corporate Express's 168 million issued shares, or around 58%.Controlling that much of its target reduces Staples' cost to around & #36;390 million.It inherited the stake in the Australian company when & #160;it took over the & #160;Dutch-based parent, Corporate Express, several years ago.Corporate & #160;Express shares went into a trading halt at its request first thing yesterday with the board flagging that a bid had been received.The offer emerged in the afternoon and the shares soared 24% to & #36;5.71, just under the value of the bid of & #36;5.725, including & #36;5.60 cash and the 12.5c a share dividend announced on March 2.As well, if Staples gets its hands on at least 90% of the shares, it will pay out a further 78c a share (worth & #36;132 million); & #160;to cash out Corporate Express's franking credits.If that's agreed to the value of the offer will be reduced by the size of the payment (to a maximum of 78c)Corporate Express shares were & #160;trading at & #36;4.60 on Tuesday but & #160;had snuck up from & #36;4.26 on March 6.Corporate Express chairman, Ian Pollard said in the statement & #160;that & #160; & quot;The Independent Directors believe this offer delivers value to shareholders and will unanimously recommend shareholders accept the offer in the absence of a higher offer and subject to the findings of the Independent Expert. & quot; & quot;The total offer consideration provides an attractive premium and compares favourably with recent similar transactions. & quot;When the franking credit benefits are taken into account, there is potential to add additional value for shareholders, & quot; he said.Corporate Express said it and & #160;Staples had signed an Implementation Agreement pursuant to which the Independent Directors unanimously recommend the Staples Offer subject to no superior proposal emerging and an Independent Expert determining that the Staples Offer is fair and reasonable to non-Staples shareholders. & quot;The Staples Offer, which will be implemented by an off-market takeover, values Corporate Express at approximately & #36;1.0 billion on an equity value basis and approximately & #36;1.1 billion on an enterprise value basis. & quot;Following a detailed review of alternatives, the Independent Directors have agreed with Staples that Corporate Express will seek an Australian tax ruling to facilitate the payment of a fully franked special dividend of no more than 78 cents per share. & quot;Subject to obtaining a favourable tax ruling, the special dividend would be declared and become payable upon the Staples Offer being declared unconditional. & quot;Funding for the special dividend (which amounts to approximately & #36;132 million) is expected to be provided by a combination of existing debt facilities and a debt facility to be provided by Staples on an arm's length basis. & quot;The application for the Australian tax ruling will be lodged as soon as possible. & quot;To the extent the special dividend is declared and paid, the Staples Offer price will reduce accordingly,' the statement explained. & #160;  

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