for the sale of his shares as a result of the merger of his company with Staples Ltd.

Mr. William Gresham, who holds about 94 percent of Chips' shares will receive $6,957,955 for his holdings in the Bermuda-based office equipment company, according to a prospectus outlining the initial public offering (IPO) of Staples Holdings Ltd. (SHL), the company set up as parent to soon to be merged Staples and Chips.

The share purchase is broken down into a cash payment or $1.9 million, a promissory note of $4.3 million and common shares worth $750,000 and redeemable at year intervals to conclude March 31, 1998.

"Chips Ltd. is a very successful company and that success has been due to the excellent attitude of the staff,'' said Mr. Gresham, who formed Chips 11 years ago.

Mr. Gresham's association with Chips, and ultimately SHL, will end at the completion of the IPO.

"This is the first merger and simultaneous IPO in Bermuda,'' said Mr. Peter Mellor, senior vice president of the Bank of Bermuda and head of the investment division.

"The combined operations of the two companies will result in the largest office equipment and supplies business in Bermuda excluding office furniture sales. A great deal of work and creativity has been required to make this merger a reality,'' he added.

With an estimated annual revenue of $12.2 million, the merger is anticipated to corner 28 percent of Bermuda's $44 million office products market.

Chips profits since September 30, 1992 through the end of 1994 were $2,551,194.

For the period March 31, 1992 to December 31, 1994, Staples profits were $820,244 with the company reporting a loss of $77,350 in the first 15 months of that period. Staples was formed in march 1991 after incorporation and acquisition of office products and service division of BBM.

Sales were $17.7 million and $13.7 million for Chips and Staples respectively over the corresponding 39 and 48 month periods outlined in the prospectus.

The combined operations of Staples, stronger in office supplies than equipment, and Chips, stronger in office equipment than supplies, will result in an estimated pro forma net income of $1.4 million on revenue of $11.6 million for the year ended December 31, 1994.

Management forecasts consolidated revenue will increase by about 24 percent in 1995 to $14.4 million. Management is predicting net income this year of $2.1 million, an increase of 43 percent over last year.

The SHL IPO is anticipated to generate $5.2 million.

The Bank of Bermuda's corporate finance group, part of the investment division, manager of the IPO, announced yesterday the offering includes 583,334 new convertible redeemable voting ten percent preferred shares at $9 each.

The IPO, which commenced yesterday, is scheduled to close May 10, 1995 at 3 p.m. is being underwritten by Bermuda International Securities Ltd., a wholly-owned subsidiary of the bank. The underwriter will receive six percent of the total gross proceeds while sub-underwriters will get a four percent commission.

GulfStream Securities Ltd., First Bermuda Securities Ltd., and the Bank of Butterfield will sub-underwrite the IPO while Bermuda Commercial Bank will act as sales agent, according to Mr. Michael Collins head of the Bank of Bermuda's corporate finance group.

The sale of the preferred shares is expected to cost under $200,000 with Mr.

Gresham covering about 82 percent of the costs an SHL bearing the remainder.

Prior to the IPO, the bank's corporate finance group completed the corporate restructuring of Staples, headed by Mr. William Midon, and Chips, that had been announced March 9.

On April 6, SHL, acquired 100 percent of the issued share capital of privately-held Staples Ltd. from Villanova Investments Ltd and about 95 percent of the issued shares of public company Chips from Mr. Gresham.

After the offering, management of SHL intends to acquire the remainder of Chips' shares by offering these shareholders the opportunity to exchange them for SHL preferred shares.

Prior to the end of the year, SHL intends to formally merge the operations of the two companies creating one wholly-owned subsidiary of SHL with Mr.

Midon as chairman and Mr. Mark White, a US citizen who joined Staples in 1992, serving as president. Mr. Midon, a US citizen, is also chairman of BSL Holdings Ltd.

SHL's board of directors also includes Bermudians, Mr. John Collis, Mr.

William Cox, Mrs. Hilary Midon, Mr. Alan Richardson, Mr. William Thomson, as well as Americans Mr. Richard J. DePiano, Staples Ltd., incorporated in 1991 is the exclusive distributor for Ricoh and 3M products in Bermuda. Chips was incorporated in 1980 and listed its commons hares on the Bermuda Stock Exchange in 1983. The company is the distributor of Sharp products in Bermuda.

The bank will host public investor presentations on April 18, 26, and May 2, at 5:30 p.m. at the Hamilton Princess.