Starboard Value Wants Staples to Merge With Office Depot

Am investment company that increased its stock in Framingham-based Staples, wants Staples to merge with its rival Office Depot.

Starboard Value, in a written letter released Tuesday, suggested Staples merge with Office Depot.

In December, Starboard announced it acquired a 6.1 percent stake in Staples and increased its existing stake in Office Depot to 9.9 percent, reported the Wall Street Journal.

In its letter to Staples, Starboard said a merger with Office Depot would be needed to double the operating profits of the combined company.

“If it becomes clear to us that you have no intention of seriously pursuing this unique and highly attractive opportunity, it would be a clear sign that significant leadership change is needed at Staples,”wrote Starboard in its letter.

Last week, Staples announced it plans to separate the CEO and chairman roles.

This week, Staples announced it “values constructive shareholder input and dialogue and regularly meets with its shareholders. The Company has met and spoken with Starboard Value on several occasions to discuss their ideas,” said the Framingham-based company in a statement.

Staples made clear that its Board of Directors carefully considers all actions that would create shareholder value and is committed to taking actions that are in the best interests of all of Staple’s shareholders, said the company in a written statement. ”The Company welcomes continued, constructive dialog with shareholders focused on enhancing the value of Staples.”

Starboard didn’t indicate plans to nominate directors on the Staples board, but the deadline for nominating directors to the Staples board is 90 days prior to the anniversary of the 2014 shareholder meeting, which is the first week of March 2015.

The Financial Times reported Staples is expected to reject any merger offer.

“The Massachusetts-based company is concerned that the Federal Trade Commission would block a merger on the grounds that it would hurt competition in the lucrative business of supplying stationary to large corporate clients,” reported the media outlet.