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Philadelphia Staples Inc. made an unsolicited $3.7 billion bid for Corporate Express on Tuesday after unsuccessful attempts to hold merger talks with the Dutch office supply company.
Corporate Express rejected the offer, saying it undervalued the company. A deal, which has been rumored for months, would allow Staples to cut costs and expand its market share and product line in the United States, where Corporate Express generates around 50% of its revenue, analysts said.
Hedge funds and investors have pressed Corporate Express to seek a buyer or break apart the company due to problems with shrinking sales and margins in the United States, its key market.
Yet the company recently added new management and said earlier this month that it had reversed slumping U.S. sales in the last quarter of 2007. It also reiterated its desire to continue as an independent firm.