|Struggling retailer Office Depot has become the new target of activist hedge fund, Starboard Value. According to Deal Book, Starboard Value has acquired a 13.3 percent interest in Office Depot with the intent of forcing operational changes to bring its earnings and margins in line with its competitors. |
In a communication to the Office Depot’s board of directors, Starboard Value made it clear that it expects to see the company take additional measures to improve company performance including reduced spending and the sale of noncore assets. Office Depot owns 50 percent of a Mexican joint venture that, according to Starboard Value could be worth more than Office Depot’s market value. Office Depot’s main competitors, Office Max and Staples, far outpace Office Depot in both earnings margins and stock price performance.