Staples Settles Shareholder Lawsuit

Staples Inc. (SPLS) agreed to settle a lawsuit filed by shareholders who said a plan to buy back $122 million worth of shares in its Internet unit from insiders was a waste of corporate assets.

Staples public shareholders will get more details about how the company decided to value the proposed buyout at about $7 a share. Venture capitalists, executives and directors paid $3.25 for the Staples.com stock in 1999.

The Staples board will set a date for a shareholder vote on the offer, under the settlement reached Friday.

The Massachusetts-based office supply retailer had announced the proposed buyout in March. Stock owners sued in Delaware Chancery Court, contending the buyback was unfair. Last month, Judge Leo Strine Jr. postponed a shareholder vote until the company disclosed how it valued the Internet unit shares.

Shareholders’ lawyers will ask the judge for $2.75 million in fees and expenses, to be paid by Staples.

Staples launched the buyback to compensate insiders after it canceled a $250-million initial public offering of Staples.com stock. Because of the unfairness allegations, Staples later said its board members agreed to accept $3.25 per share.

Shares of Staples fell 56 cents to $15.43 Monday.