Please ensure Javascript is enabled for purposes of website accessibility

Shares of Essendant Inc. Pop After News of Sycamore Partners Bid

By Daniel Miller - May 18, 2018 at 12:50PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors were happy with Essendant's options, as two entities are eager to buy the company.

What happened

Shares of Essendant Inc. (ESND), a wholesale distributor of workplace items in categories such as office facilities, industrial, automotive, and others, gained 19% on Thursday after the company confirmed Sycamore Partners made a bid to buy the company. Sycamore Partners owns Staples.

So what

Sycamore Partners owns roughly 9.9% of Essendant and made an offer to purchase the rest of the company for $11.50 per share in cash. Essendant closed at $13.10. Genuine Parts is also involved, with a prior offer for $12 per share. "We do not believe Staples' conditional, non-binding proposal to acquire Essendant for $11.50 per share in cash to be a superior proposal nor reasonably likely to lead to a superior proposal as defined under the terms of the Merger Agreement," Genuine Parts wrote in the statement, according to American City Business Journals.

Forklift with pallet of boxed goods in a warehouse.

Image source: Getty Images.

Now what

The bid from Sycamore Partners gives some insight to the future of Staples. For Staples, once a well-known and successful retailer of office supplies, bringing Essendant into the fold would indicate a push toward business-to-business retailing and further away from consumer retailing. Ultimately, the ball is in Essendant's court, and investors are happy about that.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Essendant Inc. Stock Quote
Essendant Inc.
ESND

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
311%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.