FRAMINGHAM, Mass.--(BUSINESS WIRE)--Staples, Inc. (NASDAQ: SPLS) (“Staples” or the “Company”) announced today that it has received the requisite consents with respect to its previously announced solicitation of consents (the “consent solicitation”) to the adoption of certain proposed amendments (the “Proposed Amendments”) to the terms of the Company’s 4.375% Senior Notes due 2023 (the “Notes”). The Company has also extended the consent time (the “Consent Time”) for the consent solicitation and the expiration date (the “Expiration Date”) for its previously announced tender offer (the “tender offer”) to purchase for cash any and all of the outstanding Notes.
As of 11:59 p.m., New York City time, on August 18, 2017, according to information provided by D.F. King & Co., Inc., who is acting as the information agent and tender agent in connection with the tender offer, $253,819,000 aggregate principal amount of the Notes, representing 50.76% of the outstanding aggregate principal amount of the Notes, were validly tendered (and not validly withdrawn), which represents the requisite consents to the adoption of the Proposed Amendments. The Proposed Amendments were effected by a supplemental indenture executed by the Company and HSBC Bank USA, National Association, as trustee, and will become operative at such time as the conditions precedent to the consent solicitation have been satisfied or waived, which includes, among other things, the purchase of the Notes on the Settlement Date (as defined below).
The Consent Time has been extended to 5:00 p.m., New York City time, on August 24, 2017. The withdrawal deadline for the tender offer has expired as of 5:00 p.m., New York City time, on August 11, 2017. The Expiration Date has been extended to 11:59 p.m., New York City time, on September 8, 2017. Except for the extension of the Consent Time and the Expiration Date, all of the other terms and conditions of the tender offer and the consent solicitation remain unchanged.
Holders of Notes that validly tendered (and did not validly withdraw) their Notes and validly delivered (and did not validly revoke) their corresponding consents at or prior to the Consent Time are eligible to receive $1,012.50 per $1,000 principal amount of Notes tendered (the “Total Consideration”), which includes a consent payment of $30.00 per $1,000 principal amount of Notes tendered (the “Consent Payment”). Holders who tender their Notes after the Consent Time and on or prior to the Expiration Date will be eligible to receive $982.50 per $1,000 principal amount of Notes tendered (the “Purchase Price”), but not the Consent Payment. In addition to the Total Consideration or Purchase Price, as applicable, holders who validly tender Notes will receive accrued and unpaid interest up to, but not including, the Settlement Date, which we expect to coincide with the closing of the Merger (as defined below).
Parent (as defined below) has advised the Company that it expects that any Notes which remain outstanding after consummation of the tender offer will not be secured by any liens granted under the senior secured credit facilities entered into in connection with the Merger and will be effectively subordinated to such senior secured credit facilities to the extent of the value of the collateral securing such secured indebtedness. In addition, such Notes will not benefit from any subsidiary guarantees issued to such senior secured credit facilities and the new 8.50% senior notes due 2025. Accordingly, any Notes remaining outstanding will be structurally subordinated to the indebtedness of any subsidiary that will guarantee such senior secured credit facilities and new 8.50% senior notes due 2025.
The Company will, promptly following the Expiration Date, accept for purchase all Notes validly tendered (and not validly withdrawn) on or prior to the Expiration Date (the “Acceptance Date”). Payment of the Total Consideration or the Purchase Price, as applicable, for Notes so accepted for purchase will be made by the Company promptly after the Acceptance Date (the “Settlement Date”). The Company retains the right to extend the Expiration Date and, consequently, the Acceptance Date and the Settlement Date, for any reason at its option (subject to applicable law), and expects to extend the Expiration Date so that the Settlement Date coincides with the closing of the Merger.
The tender offer and the consent solicitation are made in connection with the Agreement and Plan of Merger, dated as of June 28, 2017, by and among Staples, Arch Parent Inc., a Delaware corporation (“Parent”), and Arch Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will be merged with and into Staples with Staples continuing as the surviving corporation (such transaction, the “Merger”). The tender offer and the consent solicitation are subject to the satisfaction of certain conditions, including the consummation of the Merger. The Company anticipates that the Merger will be completed in the third fiscal quarter of 2017 but there can be no assurance that the Merger will be completed in a timely manner, or at all. Please refer to the Offer to Purchase and Consent Solicitation Statement and the related Letter of Transmittal for more information.
BofA Merrill Lunch and Deutsche Bank Securities are acting as dealer managers and solicitation agents in connection with the tender offer and the consent solicitation. Questions regarding the tender offer may be directed to BofA Merrill Lynch at (888) 292-0070 (toll-free) or (980) 388-3646 (collect) or Deutsche Bank Securities at (866) 627-0391 (toll-free) or (212) 250-2955 (collect). D.F. King & Co., Inc. is acting as the information agent and tender agent in connection with the tender offer. Documents relating to the tender offer and the consent solicitation may be obtained by contacting D.F. King & Co., Inc. at (800) 870-0126 (toll-free) or by email at email@example.com.
None of the Company, the dealer managers and solicitation agents, the information agent and tender agent or any of their respective affiliates, is making any recommendation as to whether holders should tender any Notes in response to the tender offer. Holders of Notes must make their own decision as to whether to tender any of their Notes and, if so, the principal amount of Notes to tender. This announcement is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful. The tender offer is being made solely by means of the Offer to Purchase and Consent Solicitation Statement and the related Letter of Transmittal. In those jurisdictions where the securities, blue sky or other laws require any tender offer to be made by a licensed broker or dealer, the tender offer will be deemed to be made on behalf of the Company by the dealer managers or one or more registered brokers or dealers licensed under the laws of such jurisdiction.
About Staples, Inc.
Staples brings technology and people together in innovative ways to consistently deliver products, services and expertise that elevate and delight customers. Staples is in business with businesses and is passionate about empowering people to become true professionals at work. Headquartered outside of Boston, Mass., Staples, Inc. operates primarily in North America.
Safe Harbor for Forward-Looking Statements
Statements in this news release regarding the tender offer and consent solicitation, the proposed Merger, the expected timetable for completing the Merger, future financial and operating results, future opportunities for the combined company and any other statements about Parent’s and our management’s future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” estimates and similar expressions) should also be considered to be forward-looking statements, although not all forward-looking statements contain these identifying words. Readers should not place undue reliance on these forward-looking statements. The Company’s actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which the Company may not be able to predict and may not be within the Company’s control. Factors that could cause such differences include, but are not limited to, (i) the risk that the proposed Merger may not be completed in a timely manner, or at all, which may adversely affect the Company’s business, (ii) the failure to satisfy all of the closing conditions of the proposed Merger, including the adoption of the Merger Agreement by the Company’s stockholders and the receipt of certain governmental and regulatory approvals in the U.S. and in foreign jurisdictions, (iii) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, (iv) the effect of the announcement or pendency of the proposed Merger on the Company’s business, operating results, and relationships with customers, suppliers, competitors and others, (v) risks that the proposed Merger may disrupt the Company’s current plans and business operations, (vi) potential difficulties retaining employees as a result of the proposed Merger, (vii) risks related to the diverting of management’s attention from the Company’s ongoing business operations, and (viii) the outcome of legal proceedings instituted against the Company related to the Merger Agreement or the proposed Merger. There are a number of important, additional factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the factors described in the Company’s Annual Report on Form 10-K for the year ended January 28, 2017 and its most recent quarterly report filed with the SEC. The Company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date hereof.