The announcement of the merger between Office Depot and OfficeMax had been carefully choreographed, with the intention of emphasizing that the deal was a transformative merger of equals. But that intention went awry when the deal was accidentally leaked in an errant earnings release from Office Depot early on Wednesday morning, sending bankers and lawyers scrambling, DealBook’s Michael J. de la Merced reports.
The chief executives portrayed the incident as a harmless mistake, and the planned announcement came about two hours later. Still, it prompted Office Depot’s chief executive, Neil R. Austrian, to call his counterpart at OfficeMax, Ravi K. Saligram, and apologize, Mr. de la Merced writes. “eople involved in the deal privately bemoaned the unexpectedly bumpy ride,†which recalled other times that major corporate news had been released prematurely. In this case, the mistake was blamed on the data provider Thomson Reuters.
The $1.2 billion all-stock merger, which both chief executives said could yield $400 million to $600 million in cost savings, is an effort by the companies to shore up their business after years of losing sales to rivals. In the fourth quarter, Office Depot’s revenue fell 12 percent, to $2.6 billion, from the period a year earlier, while OfficeMax’s fell 7.4 percent, to $1.7 billion. “One important negotiating point that was resolved early on was ensuring that the deal could be presented as a ‘merger of equals,’†Mr. de la Merced writes. Though Office Depot is paying a premium for OfficeMax, “neither company’s chief has a lock as the leader of the combined company.â€
The uncertainty over governance is troubling, Steven M. Davidoff writes in the Deal Professor column. The companies “punted†on the issue, saying they would draw directors from each side, “but offered few additional details,†Mr. Davidoff says. And without a chief executive lined up, “this could be a recipe for disaster.â€
ANHEUSER-BUSCH LOOKS TO RESOLVE ANTITRUST CONCERNS  | Anheuser-Busch InBev is in talks with the Justice Department to try to resolve antitrust issues with its planned deal with Grupo Modelo, the parties announced on Wednesday, saying they had jointly requested a temporary stay of the Justice Department’s antitrust suit.
<>For Anheuser-Busch InBev, the $20.1 billion deal for the rest of Grupo Modelo promises enticing access to emerging markets. But the government cried foul on Jan. 31, saying the deal would unfairly increase Anheuser-Busch InBev’s control of the American beer market. Last week, Anheuser-Busch InBev “offered broad concessions, saying it would sell the rights to Corona and other Grupo Modelo brands in the United States to Constellation Brands, one of the world’s largest wine companies, for $2.9 billion,†Mr. de la Merced writes.TIMES COMPANY PLANS TO SELL THE BOSTON GLOBE  | The New York Times Company announced on Wednesday its intention to sell its properties in New England, including The Boston Globe, to focus on its flagship newspaper. The company said it had hired Evercore Partners to manage the sale of the New England Media Group, which includes The Globe, Boston.com, The Worcester Telegram & Gazette and Globe Direct, a direct-mail marketing company. Though the Times Company is expected to seek a buyer in an auction, it said in a release that “there can be no assurance that any transaction will take place.†After the company paid $1.1 billion for The Globe in 1993, “the Boston daily brought prestige and profits to the company†for years, Amy Chozick and Christine Haughney write on the Media Decoder blog. “But recently the newspaper has suffered in an industrywide decline in circulation and advertising revenue.â€
ON THE AGENDA  | Greenlight Capital, the hedge fund run by David Einhorn, is holding a conference call at 2 p.m. to discuss its effort to get Apple to return some of its cash to sareholders. “On the call, Greenlight will provide additional details regarding the options available to Apple, including the merits of Greenlight’s suggestion of distributing perpetual preferred stock to Apple shareholders for free,†the firm said in a release. Callers in the United States can dial 1-800-901-5241 and enter the code 62063868. The American International Group and Hewlett-Packard report earnings on Thursday evening. Data on existing home sales for January is out at 10 a.m. Stanley Druckenmiller, the hedge fund magnate who left the business after 30 years, is on CNBC at 3:30 p.m. Robert H. Benmosche, A.I.G.’s chief executive, is on CNBC at 4:10 p.m.
CARLYLE REPORTS DROP IN PROFIT  | The Carlyle Group announce! d on Thur! sday that economic net income, a measure of profitability, was $182 million in the fourth quarter, compared with $254 million in the period a year earlier, while distributable earnings were $188 million, down from $247 million. Still, the firm said it raised twice as much capital last year as it did in 2011. “Our performance over the past two years was marked by steady, continuous progress across our business,†David M. Rubenstein, the co-founder and co-chief executive, said in a statement.
JOHN MACK PUTS APARTMENT UP FOR SALE  | John Mack, the former head of Morgan Stanley, is looking to sell his Upper East Side condo for $22.5 million, Curbed reports. The duplex apartment includes a terrace and solarium and has been “completely renovated in the spirit of the Dorchester in London,†the listing says.
Exxon Wins Approval for Celtic Exploration Deal  | The blessing from the Canadian government is the final regulatory hurdle for Exxon Mobil’s acquisition of Celtic Exploration for $2.64 billion, Celtic said. REUTERS
After Heinz Deal, Campbell Soup to Review Its Costs  | The chief executive of Campbell Soup, Denise Morrison, said the $23 billion deal for H.J. Heinz was a “call to action†for her company “! to be eve! n more aggressive about costs,†according to Reuters. REUTERS
Incoming Chief of BHP Billiton Says Deals Aren’t a Focus  | “You would be wrong to say that M.&A. is completely excluded, but it is not central to the strategy that I am shaping up,†Andrew Mackenzie, the incoming chief executive of BHP Billiton, said. REUTERS
Taiwan’s Finance Ministry Opposes Bank Merger  |Â
WALL STREET JOURNAL
JPMorgan Said to Be Looking to Sell Mortgage Bonds  | JPMorgan Chase “is seeking to sell securities tied to new U.S. home loans without government backing in its first offering since the financial crisis that the debt helped trigger. The deal may close this month, according to a person familiar with the discussions,†Bloomberg News reports. BLOOMBERG NEWS
Citigroup’s Chairman Said to Rule Out a Possible Breakup  | Michael E. O’Neill, Citigroup’s chairman, wh! o once ur! ged the company to consider splitting up, “has concluded that breaking up Citigroup doesn’t make sense now, given economic and regulatory uncertainty as well as a host of financial considerations,†The Wall Street Journal reports. WALL STREET JOURNAL
How Wells Fargo Invests Its Own Money  | Wells Fargo “invests in buyouts and venture capital deals largely on its own, with capital only from Wells Fargo itself and some employees,†but the activity is considered “merchant banking,†making it likely exempt from the Volcker Rule, Reuters writes. REUTERS
European Banks Move to Reassess Risk  | Big banks in Europe are recalculating the riskiness of certain assets, a strategy that increases their ratio of capital to risk-weighted assets, The Wall Street Journal reports. “While such maneuvering has been going on for years, analysts say it appears to be accelerating at some major European banks.†WALL STREET JOURNAL
Forstmann Little Said to Put Talent Agency on the Block  | The private equity firm Forstmann Little, which is in the process of! selling ! its holdings, “has decided to put its sports and modeling talent agency IMG up for sale, and is in the process of picking an investment bank to lead the effort, three people familiar with the matter said,†Reuters reports. REUTERS
Herbalife Looks to Improve Clarity of Disclosures  | On a conference call, Herbalife said it would change how it identifies its customers, after criticism from the hedge fund manager William A. Ackman. REUTERS
An ‘Icahn Squeeze’ in Herbalife Stock  | The structure of Carl C. Icahn’s position in Herbalife suggests it could end up putting upward pressure on the stock in early March, an analyst wrote, according to Barron’s. BARRON’S
Hedge Fund Started by Former Goldman Trader Said to Be Shutting Down  |Â
FINALTERNATIVES
Blackstone, Fielding Bids for SeaWorld, Said to Favor I.P.O.  | The Blackstone Group “is leaning toward an initial public offering of SeaWorld Entertainment Inc. after receiving bids from Apollo Global Management and Onex Corp. for the theme-park operator, said people familiar with the matter,†Bloomberg News reports. BLOOMBERG NEWS
Owner of Grand Central Terminal Joins Opposition to Empire State Building I.P.O. Â |Â
BLOOMBERG NEWS
Tesla’s Earnings Indicate Some Customer Cancellations  | Tesla’s latest earnings release suggests that some customers canceled orders when it became time to make a substantial down payment. DealBook Â'
Pinterest Said to Raise Money at $2.5 Billion Valuation  | The popular scrapbooking site Pinterest raised $200 million, AllThingsD reports. ALLTHINGSD
LivingSocial Raises $110 Million From Existing Investors  |Â
BLOOMBERG NEWS
A Revolving Door in Washington With Spin, but Less Visibility  | The important fights in Washington are happening away from the media gaze. For lobbyists, the real targets are regulators and staff members for lawmakers, Jesse Eisinger writes in his column, The Trade. The Trade Â'
Chesapeake Wraps Up Review of C.E.O.’s Dealings  | Chesapeake Energy said its internal examination of te financial dealings of Aubrey K. McClendon, the chief executive who is stepping down on April 1, found no “intentional†misconduct, Reuters reports. REUTERS
Dissent at the Fed on Measures to Lift Growth  | The New York Times reports: “There are widening divisions among officials of the Federal Reserve over the value of its efforts to reduce unemployment, but the authors of its bond-buying policy remain firmly in control, according to an official account of the January meeting of the Fed’s policy-making committee.†NEW YORK TIMES
