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Non-Tech : Staples (SPLS) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (183)	4/3/2001 7:02:23 PM
From: Glenn Petersen	Respond to of 184

SPLS directors to forgo profits from buyback: news.cnet.com Staples execs won't profit from buyback By Reuters April 3, 2001, 11:00 a.m. PT FRAMINGHAM, Mass.--Office-products retailer Staples said Tuesday its directors will forgo making a profit from the buyback of its online arm's stock, in a bid to assuage irate investors who charged that the plan unfairly benefited management. Analysts said the move by Staples, based here, will likely quell the ire of the company's largest shareholders and clear the way for the retailer to get on with its previously announced plan to combine its direct-to-consumer operations. "They started a fire and now they've quenched it, but I think the smoke still lingers as well as just a bad taste," said Brian Postol, retail analyst with A.G. Edwards, who added that the worst was over. He said at the end of the day people will forgive, and the move will likely help extinguish some of the fire that burned some of the larger investors. "At least they're stepping back and seeing that instead of giving themselves their own payday, they're at least giving a genuine look at trying to be independent and not take the payoff," said Postol, who rates Staples stock as "maintain." Under the original buyback plan, which investors said put too rich a value on the company's Staples.com online business, each share of Staples.com tracking stock would be exchanged for 0.44 of a share of Staples common stock. The offer valued Staples.com stock at about $7 a share, more than double the $3.25 at which they were originally sold, and put the company's worth at about $900 million. That sparked investor fury because they said it took no account of the fading appeal of Internet retailers. To eliminate the appearance of a conflict of interest, the company said the Staples board voted to allow members to rescind their personal stakes in Staples.com. All 13 directors, including Chief Executive Thomas Stemberg and Chief Operating Officer Ronald Sargent, agreed to sell back their shares of Staples.com at the original purchase price, each forgoing the opportunity for personal gain from the conversion. "The board strongly believes that its proposal to convert Staples.com stock into Staples common stock is the right thing to do, for both Staples shareholders and Staples.com shareholders," Stemberg said in a statement. "The reputation, integrity and credibility of our company and its board of directors is of paramount importance to us," he added. The company announced in mid-March that it would combine its Internet operations with its small-business and consumer-catalog operations--or direct business--to better serve its customers. The integration is designed to help Staples operate the three businesses more efficiently, with a unified merchandising team, a unified marketing team and a unified customer support team. The board said it will submit the proposal for shareholder approval at its annual meeting later this spring.