DEFM14A: ODP Corp. to Go Private in $28/Share Cash Merger

The ODP Corporation's board unanimously recommends stockholders approve a $28.00 per share all-cash merger with ACR Ocean Resources LLC, representing a 34.5% premium.

Summary

• The ODP Corporation (ODP) has entered into a merger agreement with ACR Ocean Resources LLC (Parent) and Vail Holdings 1, Inc. (Merger Sub), an affiliate of Atlas Holdings LLC.
• If the merger is completed, ODP stockholders will receive $28.00 in cash for each share of common stock, without interest and subject to withholding taxes.
• This offer represents a premium of approximately 34.5% over ODP's closing stock price of $20.82 on September 19, 2025, the last trading day before the merger agreement announcement.
• The ODP Board of Directors unanimously determined the merger to be advisable, fair, and in the best interests of ODP and its stockholders, recommending a 'FOR' vote on the merger proposal.
• A special meeting of stockholders will be held virtually on Friday, December 5, 2025, at 10:00 a.m. Eastern Time, to vote on the merger agreement, executive compensation, and an adjournment proposal.
• The merger is expected to be completed by the end of 2025, subject to stockholder and regulatory approvals.
• Outstanding ODP equity awards (options, RSU awards, PSU awards) will be converted into cash payments or forfeited, depending on the award type and vesting conditions.

Sentiment

Score: 8

Explanation: The sentiment is highly positive due to the significant cash premium offered to shareholders, the unanimous board recommendation, and the certainty of an all-cash transaction. While acknowledging the loss of future upside as an independent entity and inherent transaction risks, the immediate and substantial value realization for shareholders drives the strong positive sentiment.

Positives

• The merger consideration of $28.00 per share represents a significant premium of 34.5% over the closing stock price on September 19, 2025.
• The offer is a 35.7% premium over the closing price on September 9, 2025, prior to the final offer, and a 131.8% premium over the 52-week low of $12.08 on April 8, 2025.
• The consideration is entirely cash, providing ODP stockholders with immediate and certain value, mitigating risks associated with remaining a public company or receiving stock consideration.
• The ODP Board of Directors unanimously recommended the merger, following extensive consultation with legal and financial advisors, and a comprehensive review process.
• J.P. Morgan Securities LLC, ODP's financial advisor, rendered an opinion that the merger consideration is fair, from a financial point of view, to ODP common stock holders.
• The merger is not subject to a financing condition, with Parent having committed equity financing of up to $975,000,000.
• Parent has agreed to use reasonable best efforts to obtain regulatory approvals, including proposing and agreeing to any regulatory remedy, with certain limitations.

Negatives

• ODP stockholders will forgo any potential future increase in ODP's value as an independent public company.
• The merger consideration of $28.00 per share represents a 13.9% decrease from the 52-week high of $31.88 on October 28, 2024, although market conditions have changed since then.
• There is a risk that necessary antitrust approvals may be delayed, conditioned, or denied, which could prevent or delay the merger.
• If the merger is not completed, ODP's stock price is likely to decline significantly, and the company will have incurred substantial transaction expenses and opportunity costs.
• Restrictions on ODP's business operations during the pendency of the merger may limit its ability to pursue certain opportunities or make changes.
• The merger agreement includes a termination fee of $36,560,000 (or $16,870,000 under specific early termination circumstances) payable by ODP under certain conditions, which could deter alternative proposals.
• Any gains from the merger consideration will generally be taxable for U.S. federal income tax purposes for U.S. holders.

Risks

• Completion of the merger is subject to obtaining required shareholder and regulatory approvals, which may be delayed or denied.
• ODP's stock price may fluctuate during the pendency of the merger and could decline if the merger is not completed.
• Potential litigation relating to the merger could be instituted against ODP or its directors, managers, or officers.
• Disruptions from the merger could harm ODP's business, including current plans and operations, and divert management's time and attention.
• ODP's ability to retain and hire key personnel may be impacted during the pendency of the merger.
• Potential adverse reactions or changes to business relationships with customers, suppliers, and employees could result from the announcement or completion of the merger.
• Legislative, regulatory, and economic developments, including tariffs, inflation, and geopolitical risks, could affect ODP's financial performance.
• Unexpected costs, liabilities, or delays associated with the transaction may arise.
• The response of competitors to the transaction could be adverse.
• Certain restrictions during the pendency of the merger may impact ODP's ability to pursue business opportunities or strategic transactions.
• The merger may be more expensive to complete than anticipated due to unexpected factors or events.

Future Outlook

The merger is expected to be completed by the end of 2025, subject to timely satisfaction of closing conditions, including stockholder and regulatory approvals. If the merger is not completed, ODP will remain an independent public company, and its common stock will continue to be listed on Nasdaq. Management expects to operate the business similarly, but the stock price would likely decline significantly, and there is no assurance of future growth or alternative transactions.

Management Comments

• Gerry P. Smith, Chief Executive Officer, stated that the ODP Board unanimously determined the merger agreement and transactions are advisable, fair to, and in the best interests of ODP and its stockholders.
• The ODP Board unanimously recommends that stockholders vote FOR the proposal to adopt the merger agreement, FOR the named executive officer merger-related compensation proposal, and FOR the adjournment proposal.

Industry Context

The ODP Board considered the long-term challenges in the office products and retail sector, and investor sentiment that the retail sector is in secular decline, as factors supporting the decision to enter into the merger agreement. The proposed merger offers a certain cash value in an industry facing ongoing structural headwinds.

Management Changes

Corporate Governance

Legal Proceedings

• The company is subject to potential stockholder litigation related to the merger agreement, the merger, or other contemplated transactions, including disclosures made under securities laws and regulations.

Stakeholder Impact

• Shareholders: Will receive $28.00 cash per share, realizing a significant premium over recent trading prices, but will no longer have an equity interest in ODP's future performance. Dissenting shareholders may seek appraisal rights.
• Employees: Continuing employees will receive base salary/wage rates, target annual cash bonus/commission opportunities, and welfare/other benefits no less favorable in the aggregate for a period of 12 months post-closing or until December 31, 2026. Severance arrangements will also be no less favorable. Equity awards will be converted to cash or forfeited.
• Directors and Executive Officers: Will receive cash for their ODP common stock and equity awards (with specific vesting/payment terms for RSUs and PSUs). They are also entitled to severance benefits under a change-in-control plan and ongoing indemnification and insurance arrangements.
• Customers, Suppliers, Creditors, Lessors: ODP will use commercially reasonable efforts to preserve substantially intact its business organization and material business relationships with these parties.

Next Steps

• ODP stockholders will vote on the merger proposal, named executive officer merger-related compensation proposal, and an adjournment proposal at a special meeting on December 5, 2025.
• The parties will continue to seek and obtain all required regulatory clearances and approvals, including the expiration or early termination of the HSR Act waiting period.
• The merger is expected to close by the end of 2025, assuming timely satisfaction of all closing conditions.
• Following completion, ODP common stock will be delisted from Nasdaq and deregistered under the Exchange Act.

Key Dates

Recommendation

The unanimous recommendation by the ODP Board, coupled with J.P. Morgan's fairness opinion, strongly suggests that the $28.00 per share cash offer is a compelling value for shareholders. The significant premium over recent trading prices (34.5% over the last trading day prior to announcement and 131.8% over the 52-week low) provides immediate and certain liquidity at an attractive valuation. The absence of a financing condition and Parent's commitment to regulatory efforts further de-risks the transaction. While the offer is below the 52-week high, the board's consideration of long-term industry challenges and the uncertain prospects of remaining independent make the cash certainty highly appealing. For investors seeking a quick, profitable exit, this represents a strong opportunity.

Keywords

Merger, Acquisition, ODP Corporation, ACR Ocean Resources, Atlas Holdings, Office Depot, Proxy Statement, Cash Offer, Stockholder Vote, Corporate Governance, SEC Filing, Private Equity