Bermuda's top banking executives.

"I believe there is a need in certain industries in Bermuda to consolidate their businesses into larger and more effective units not only to improve their competitive edge but also to begin the process of expanding their business focus,'' said Mr. Peter Mellor, Bank of Bermuda senior vice president and head of the bank's investment division.

The Staples Ltd./Chips Ltd. merger under new parent company Staples Holdings Ltd. and its initial public offering illustrated one business sector's recognition of the need for new partnerships, he said.

"This transaction represented an innovative structure.'' The merger resulted in the largest office equipment and supplies business in Bermuda excluding office furniture sales.

Larger more powerful businesses were better positioned to be regional leaders, he said.

Mr. Mellor also said the success of the offering was a sign of continuing investor confidence in local issues.

The combined merger/initial public offering was a first for Bermuda. Staples Holdings Ltd. "should commence trading on the Bermuda Stock Exchange on May 29,'' the company's initial public offering manager, the Bank of Bermuda's Corporate Finance Group, said yesterday.

More than 340 new shareholders were attracted to the initial public offering which commenced April 10 and closed Wednesday May 10 and was underwritten by Bermuda International Securities Ltd., a wholly-owned subsidiary of the bank.

The offering was oversubscribed by about 15.5 percent with applications for about 675,000 shares.

A total of 583,334 convertible redeemable voting 10 percent preferred shares were offered to the public at $9 per share with net proceeds estimated at $5.2 million.

"On average, applications will be cut back by 15.5 percent with preference given to smaller shareholders,'' the group said.

Share certificates will be sent out in about five business days.

Mr. William Midon, president of the new holding company, will be chairman of the new company while Chips president Mr. William Gresham's association with Chips, and with Staples Holdings Ltd., for all intents and purposes, ended with the completion of the public offering.

GulfStream Securities Ltd., First Bermuda Securities Ltd., and the Bank of Butterfield are sub-underwriters of the offering while Bermuda Commercial Bank will act as sales agent.

Consolidated revenue the new entity 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.

Staples Ltd., incorporated in 1991, is the exclusive distributor for Ricoh and 3M products in Bermuda.