Starboard Value LP, an activist hedge fund nominated six candidates to the board of directors of Office Depot, Inc. (NYSE:ODP) citing that it is significant for the company to reconstitute itself now whether it intends to continue as a standalone company or to merge its business with OfficeMax Inc (NYSE:OMX).
Starboard Value LP is the largest shareholder of The Office Depot, Inc. (NYSE:ODP) with 14.8 percent stake in the company.
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According to the investment management firm, a new and improved board is important for Office Depot Inc (NYSE:ODP) to act immediately to improve its current operating business performance on a standalone basis and to position itself to maximize the long-term synergies with OfficeMax Inc (NYSE:OMX) if the proposed merger if approved.
Starboard Value LP also explained that a new board is necessary for Office Depot Inc (NYSE:ODP) to select its own committee of directors to work with OfficeMax Inc (NYSE:OMX) committee of directors in the process of appointing a CEO and a slate of qualified directors to lead the combined company.
The investment management firm emphasized that its six candidates for election to the board of Office Depot Inc (NYSE:ODP) are highly-qualified with well-balanced mix of skill sets to ensure that the company will be able to openly evaluate all strategic alternatives and address all future challenges successfully.
Furthermore, Starboard Value LP warns that it is a mistake for the company no to act immediately and wait for a shareholder meeting to add its slate of candidates to reconstitute the board.
In its letter to the board of Office Depot Inc (NYSE:ODP), the investment management firm wrote, “Waiting for a shareholder meeting to add our highly-qualified candidates on the Board is a mistake. Office Depot cannot afford to wait to improve its operating performance. As we have made clear in our discussions, we would like to work with you to reach an agreement to voluntarily reconstitute the Board immediately so as to include these highly-qualified candidates. If the current Board does not engage with us now to reconstitute the Board at this critical time, then Office Depot should immediately take the necessary steps to schedule its annual meeting of shareholders for a date prior to the potential consummation of the merger with OfficeMax…”
The candidates of Starboard Value LP include its CEO Jeffrey Smith, Robert Nardelli, former CEO of Chrysler and Office Depot, Inc. (NYSE:ODP), David Siegelm CEO of Frontier Airlines, James Fogarty, CEO of Orchard Brands, Cythia Jamisoon, director of Tractor Supply Co, and Joseph Vassalluzzo, non executive chairman of Federal Realty Investment Trust.