Has Christmas Come Early for OfficeMax?
Shares of the office supply retailer OfficeMax (NYSE:OMX) have hovered below $10 per share for more than a year. Lagging behind both Staples (NASDAQ:SPLS) and Office Depot (NYSE:ODP), the company is downsizing and closing unprofitable locations to compensate for low sales.
However, shares are trading 20 percent higher Friday afternoon after Boise Cascade, a company in which OfficeMax owns a 20.4 percent stake, announced it would be going public. The stock initially rose more than 29 percent to $10.02 per share, in its largest intraday gain since April 2009. OfficeMax’s stock has advanced 81 percent this year to date.
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Boise Cascade, a building products distributor, filed for an initial public offering after the market closed on Thursday. After the company goes public, OfficeMax’s stake could be worth as much as $200 million, according a research note written by Janney Montgomery Scott analyst David Strasser.
Unlike OfficeMax, Office Depot has problems surfacing. Last month, the company’s board implemented a poison-pill plan, a strategy used to deter potential takeovers. The plan will go into effect if one particular shareholder attempts to acquire more than 15 percent of the company’s shares by giving other shareholders the right to increase their stake. Starboard Value, an activist hedge fund holding a 14.8 percent stake in the company, called upon the board to revoke the plan on Friday.