Staples, Inc. (NASDAQ: SPLS), the office-supply chain that's chasing an e-commerce makeover, increased the most in four years after the Wall Street Journal reported that it's in buyout talks. The company is in early negotiations with several private equity firms, according to the newspaper. Staples presently has a market valuation of about $ 6.4 billion. With a classic buyout premium, the company could set a price of $ 7 billion or more, the Journal said. The shares increased as much as 15 percent to $ 10 in New York, marking the biggest intraday increase since February 2013. They had been down 4.3 percent this year before the rally.
The talks come less than a year after Staples was prevented in an attempt to make its own acquisition. A federal judge hindered Staples' $ 6.3 billion takeover of Office Depot Inc. in May, and the two sides walked away from the deal. Staples, based in Framingham, Massachusetts, reported on the Journal report. A buyout might enable the company to restore its operations out of the public spotlight. The three-decade-old business is already at crossroads, with sales dropping and Amazon.com Inc. impending over its industry. As part of its turnaround plan, Chief Executive Officer Shira Goodman plans to enhance its sales from 80 percent to 2020 percent from 60 percent now.
Staples also intends to obtain more growth from a market it considers neglected: small businesses. It is working on a national marketing campaign, adding business services and teaming up with the co-working company Workbar, a partnership that is allowing people to set up offices within Staples stores. The idea is to become a "partner for business," Goodman stated in an interview earlier this year. "We have to move the brand."