Office Depot Says Staples Deal Is Dead

Office Depot Inc. Chief Executive David Fuente said that his company’s $4.6-billion deal to merge with Staples Inc. is dead and that Office Depot will resume its fast pace of expansion by 1998. On Monday, U.S. District Judge Thomas Hogan, in a preliminary injunction, ruled that the Federal Trade Commission had shown a “reasonable probability” the merger would substantially impair competition. Fuente said that Office Depot will take a charge of $6 million or more in the second quarter to cover fees paid to lawyers and investment bankers arising from the thwarted merger. Fuente said Delray Beach, Fla.-based Office Depot’s board was scheduled to meet today but was unlikely to vote to appeal Monday’s ruling. Westborough, Mass.-based Staples said after the ruling that it would probably scrap the deal. Office Depot shares fell $3.8125 to close at $15.625 on the NYSE. Staples shares rose $1.0625 to close at $24.3125 on Nasdaq.