By Phil Wahba
(Reuters) - Investment firm Neuberger Berman LLC has called on OFFICEMAX (OMX.NY)Inc's
Neuberger, in a filing with the U.S. Securities and Exchange Commission on Monday, also disclosed it held 5 percent of OfficeMax's shares, or 4.35 million shares, up from 4 percent earlier.
In a letter to CEO Ravi Saligram dated June 18, Neuberger Berman Managing Director Benjamin Nahum said that the "anemic" job recovery and demand for office supplies were "significant hurdles" to maintaining earnings growth and bolstering OfficeMax's share price.
Neuberger's Nahum cited the "palpable frustration" among shareholders that OfficeMax is not paying dividends or buying back shares. He also said the absence of a repurchase plan told the marketplace that "the board does not believe in (OfficeMax's) future."
In an e-mailed statement, OfficeMax said: "We respect the perspectives of our shareholders and look forward to continuing to have an open and constructive dialogue with all of them. We remain highly committed to maximizing shareholder value."
Neuberger also wants OfficeMax's board to change its bylaws so that the company has to get shareholder approval before making any "transformational" deal. The fund wants the company to sell off its Australia and New Zealand assets and use the money on share buybacks or to initiate a dividend.
Barring that, Neuberger said it may nominate new directors "more attuned to shareholder priorities" at OfficeMax's next annual meeting, in spring of 2013. Neuberger said it would monitor OfficeMax's progress over the course of the year.
OfficeMax is the third-largest U.S. office supply chain and competes with Office Depot Inc
Sales at all three chains have suffered as corporate customers and other shoppers cut back on discretionary spending, forcing the retailers to rely on cost cuts to boost profits.
In November, the company told INVESTOR (INVEB.ES) it would close some stores, shrink others, curb expansion in general and look for more ways to cut costs as it deals with weak sales.
(Editing by Bob Burgdorfer and Muralikumar Anantharaman)
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