STAPLES, Shareholders Settle Lawsuit

FRAMINGHAM, Mass. (AP) _ Staples Inc. and a shareholder group have settled a lawsuit filed in March challenging Staples' plan to buy back shares of its online unit, Staples.com. <br><br>Staples agreed

Tuesday, July 3rd 2001, 12:00 am

By: News On 6

FRAMINGHAM, Mass. (AP) _ Staples Inc. and a shareholder group have settled a lawsuit filed in March challenging Staples' plan to buy back shares of its online unit, Staples.com.

Staples agreed to include information relevant to the value of Staples.com stock in its proxy statement for shareholders. A Delaware court must still approve the plan.

Delaware Chancery Court Judge Leo Strine Jr. last month declined to halt a shareholder vote on the plan, but ordered it postponed. He said stockholders must decide the fairness of the deal themselves.

Shareholders were to vote on the plan at Staples' annual meeting this month. Instead, the vote on the buyback will be held in August.

Richard S. Schiffrin, an attorney for the shareholder group, on Monday said the additional information will provide ``full and fair disclosure to Staples shareholders and a sound basis for them to decide whether to approve the transaction.''

The suit was filed in response to the superstore's plans to buy back shares of Staples.com at about $7 a share, more than twice the $3.25 a share some directors and executives paid.

Shareholders, concerned that the stock was overvalued, claimed in the lawsuit that the buyback was too favorable for the executives and large investors who exclusively own the shares.

In April, Staples said its 13 directors would forgo making a profit on the buyback to avoid even the appearance of a conflict of interest.

Staples also agreed to pay the fees and expenses for the attorneys representing the shareholder group.