Staples/Office Depot Merger In The Works?
NEW YORK – Activist investor Starboard Value may be fostering a merger between Staples and Office Depot.
The hedge fund has reportedly acquired a 6 percent stake in Staples and has increased its position in Office Depot from 8.6 to 10 percent of shares.
Retail analyst David Strasser of Janney Capital Markets believes Starboard is intent on getting both office supply chains to the negotiating table, and said neither retailer seemed opposed to a merger based on his recent discussions with their management teams.
Staples is the nation’s No. 1 office-supply chain, and still maintains a sizeable lead over second-place Office Depot, even after its merger last year with OfficeMax.
Observers believe a consolidation would allow the specialty chains to better defend against office-supply inroads from Costco, Walmart, Amazon.com and other discounters, although many, including management, doubt the merger would pass regulatory muster with the Federal Trade Commission (FTC), given the lack of competition on the contract side of their businesses.
Starboard, which ousted the entire board at Darden Restaurants (Olive Garden, LongHorn Steakhouse) earlier this year, pressed for a merger between Yahoo and AOL in September, the New York Times reported.
Amazon Begins 4K Streaming
SEATTLE – Amazon.com has begun offering video content in 4K resolution.
The higher standard is initially available for a handful of films from Sony Pictures Entertainment, select TV shows, and all Amazon original content through the company’s Instant Video library.
Viewing Amazon’s UHD content requires compatible, app-equipped Ultra HD smart TVs from LG Electronics, Samsung and Sony, the e-tailer said, with more models to be added next year.
The company also confirmed its prior commitment to provide the higher-res streams to members of its $99/year Prime service tier at no additional cost.
A selection of digitally-delivered UHD films is also available for purchase starting at $20.
Best Buy Exiting China
MINNEAPOLIS — Best Buy’s ill-fated foray into China is coming to a close.
The company has entered into a definitive agreement to sell its 184-store chain of Five Star CE and appliance shops to a China-based real estate firm.
Best Buy bought a majority interest in the business in 2006 for $180 million, marking its entry into the Chinese retail market. That same year it also opened the first of nine Best Buy-branded stores, which were shuttered in 2011.
Indeed, the company’s global expansion strategy, launched under prior management teams, has met with mixed success, and current president/ CEO Hubert Joly has rationalized overseas operations — including its 50 percent interest in Best Buy Europe — to focus on the core U.S. business.