Saturday, June 15, 2013
Reuters is reporting that Office Depot Inc (ODP) investor Starboard Value LP has sued the second-largest U.S. office supply retailer for not holding an annual shareholder meeting to elect directors.
Starboard Value filed the complaint with the Court of Chancery in Delaware, where Office Depot is incorporated. The complaint states that the company had not held an annual shareholder meeting for 13 months.
Starboard has nominated six people for the 10-member Office Depot board. They cited the lack of experience among current board members and stressed the need to reconstitute the board whether or not its proposed merger with rival OfficeMax Inc (OMX) goes through.
"The proposed merger provides no basis for the company to deprive stockholders of their right to meet annually to elect directors," Starboard said in the complaint.
This lawsuit could potentially drive down Office Depot’s stock price which is currently trading around $4.28. While that could be a good thing for investors looking to initiate new positions it might not be the best thing for the company considering the stock-for-stock merger deal with OfficeMax.