Genuine Parts Company announced that it has received notice from Essendant of its intent to terminate the merger agreement to combine GPC’s S.P. Richards business products business with Essendant, entered into on April 12, 2018.

The notice stated that Essendant’s Board of Directors has determined that the competing acquisition proposal from Staples, Inc. is a “Superior Proposal” as defined in the Merger Agreement.

Under the terms of the Merger Agreement, this notice commenced a three-day match period, during which GPC intends to evaluate its rights under the existing Merger Agreement. GPC continues to believe the Merger Agreement represents a superior proposal and will not make any counterproposals. Therefore, GPC anticipates that the Merger Agreement will terminate at the end of the three day match period.

Upon termination of the Merger Agreement, Essendant will be required to pay a termination fee to GPC in the amount of $12 million.

GPC issued the following statement:

The Merger Agreement announced on April 12 was the result of a rigorous due diligence and negotiation process that we believe accurately determined fair value for the transaction combining S.P. Richards and Essendant.

We believe that the prospects for S.P. Richards remain strong and that there is significant opportunity for S.P. Richards to grow and deepen its relationships with both independent dealers and other customer channels. As such, we are confident in our ability to drive growth and profitability for S.P. Richards and to support value creation for GPC shareholders.

J.P. Morgan is acting as financial advisor and Davis Polk & Wardwell LLP is acting as legal counsel to GPC.