Grupo Gigante SAB, a Mexican owner of office-supply stores, has lined up financing from Credit Suisse Group AG and Banco Bilbao Vizcaya Argentaria SA for its proposed takeover of Office Depot Inc.’s local unit, a person with knowledge of the matter said.
Gigante, which already owns half of the unit, has received indications from Office Depot that its offer to buy the rest for $700 million will be accepted as soon as next week, said the person, who asked not to be named because the discussions are confidential. Office Depot shares rose as much as 2.8 percent today before trimming gains to 0.9 percent in New York. Gigante shares were unchanged.
Jorge Hernandez Talamantes, an investor relations official with Mexico City-based Gigante, said in a telephone interview that talks are ongoing. He declined to comment on the financing, timing or terms of a possible deal. Brian Levine, a spokesman for Boca Raton, Florida-based Office Depot, confirmed that talks were continuing and declined to comment further. Drew Benson, a New York-based spokesman for Credit Suisse, declined to comment on the acquisition financing, as did Rodolfo Benitez, a spokesman for BBVA’s Bancomer unit.
Office Depot is considering the sale amid pressure from activist investor Starboard Value LP, its largest shareholder, to cut costs and improve operations. Starboard said in a letter to Office Depot made public Feb. 27 that a sale of the Mexico stake at a “full and fair price is clearly in the best interest” of shareholders.
Gigante announced in February it had offered 8.78 billion pesos ($700 million) for the stake. Gigante extended its initial offer deadline of March 15 after Office Depot agreed to a separate merger with competitor OfficeMax Inc. Earlier this month, Office Depot said it received agreement from Naperville, Illinois-based OfficeMax to proceed with the Gigante negotiations.