Mike Blake / REUTERS
Several private equity companies, including Bain Capital, are looking at a buyout offer for office supplies retailer Staples, according to a report in Fortune magazine.
By Roland Jones, NBC News
Several private equity companies, including Bain Capital, are looking at a buyout offer for office supplies retailer Staples, according to a report in Fortune.
It would be a second bite at the apple for Bain, the private equity firm founded by GOP presidential candidate Mitt Romney. Staples launched in 1986 with backing from Bain.
Discussions are in preliminary stages, according to the report, and the earliest an offer for the retailer could come is late this year. It would likely take several months to arrange financing, and those involved in the potential deal would like to avoid the public relations headache that could arise from a presidential candidate?s former company bidding for Staples ahead of the Nov. 6 election, Fortune said.
Shares of Staples have declined 28 percent since hitting a recent high of 16.70 on March 26, and the retailer?s revenue has remained relatively steady at about $25 billion over the past few years, according to a regulatory filing. Net income for the year ending January 27 was almost $1 billion and has risen steadily over the past two years.
Fortune reckons Staples could benefit from the move by states to start imposing sales taxes on Internet purchases, which could turn those seeking cheaper deals at online stores such as Amazon.com back to traditional retailers such as Staples, which has a strong online operation, the report said.
The size of the deal could be an issue, Fortune noted.
If private equity investors paid a 20 percent premium over Staples? current market capitalization of $8.16 billion they would have to write a check for at least 30 percent of $9.79 billion, which comes to $2.94 billion. That kind of deal size would require at least three firms to participate, the report said.
Staples declined to comment for this article.
Click here to check on shares of Staples.
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