Office Depot Soars 17% Amid News Of Merger With Staples

Shares of Office Depot Inc (NASDAQ: ODP) opened more than 17 percent higher Tuesday amid news that it may merge with Staples, Inc. (NASDAQ: SPLS).

The price and details of the transaction were not yet known, however, the companies were in “advanced talks to combine,” according to a Wall Street Journal report.

The report suggested that cost savings from a merger could double operating profits from the combined entity, which would be attractive to Starboard Value LP, who holds approximately 10 percent of Office Depot and 6 percent of Staples.

Analyst Brian Sozzi recently cited three reasons why a merger should be avoided. At the moment, however, investors appeared to be in favor of the idea.

Shares of Staples also opened higher and recently traded at $18.52, up 8 percent.

Office Depot recently traded at $8.93, up 17 percent.