Schedule 13D/A — IKON Office Solutions, Inc.

SC 13D/A 1 sc13da501874098_06292007.htm Schedule 13D/A — IKON Office Solutions, Inc.

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________

SCHEDULE 13D
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)

(Amendment No. 5)¹

IKON Office Solutions, Inc.
(Name of Issuer)

Common Stock, No Par Value
(Title of Class of Securities)

451713101
(CUSIP Number)

STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

June 29, 2007
(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box o.

Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

(Continued on following pages)

(Page 1 of 22 Pages)

_______________________
¹ The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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Page 2 of 22 Pages

	1.	NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
		STEEL PARTNERS II, L.P.
	2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP^*
			(a) o
			(b) o
	3.	SEC USE ONLY
	4.	SOURCE OF FUNDS^* WC
	5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) o
	6.	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
Number of Shares Beneficially Owned by Each Reporting Person With
		7.	SOLE VOTING POWER 12,456,300
		8.	SHARED VOTING POWER - 0 -
		9.	SOLE DISPOSITIVE POWER 12,456,300
		10.	SHARED DISPOSITIVE POWER - 0 -
	11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 12,456,300
	12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES^* o
	13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.95%
	14.	TYPE OF REPORTING PERSON^* PN

^*SEE INSTRUCTIONS BEFORE FILLING OUT!

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	1.	NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
		STEEL PARTNERS, L.L.C.
	2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP^*
			(a) o
			(b) o
	3.	SEC USE ONLY
	4.	SOURCE OF FUNDS^* OO
	5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) o
	6.	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
Number of Shares Beneficially Owned by Each Reporting Person With
		7.	SOLE VOTING POWER 12,456,300
		8.	SHARED VOTING POWER - 0 -
		9.	SOLE DISPOSITIVE POWER 12,456,300
		10.	SHARED DISPOSITIVE POWER - 0 -
	11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 12,456,300
	12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES^* o
	13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.95%
	14.	TYPE OF REPORTING PERSON^* OO

^*SEE INSTRUCTIONS BEFORE FILLING OUT!

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	1.	NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
		WARREN G. LICHTENSTEIN
	2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP^*
			(a) o
			(b) o
	3.	SEC USE ONLY
	4.	SOURCE OF FUNDS^* OO
	5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) o
	6.	CITIZENSHIP OR PLACE OF ORGANIZATION USA
Number of Shares Beneficially Owned by Each Reporting Person With
		7.	SOLE VOTING POWER 12,456,300
		8.	SHARED VOTING POWER - 0 -
		9.	SOLE DISPOSITIVE POWER 12,456,300
		10.	SHARED DISPOSITIVE POWER - 0 -
	11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 12,456,300
	12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES^* o
	13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.95%
	14.	TYPE OF REPORTING PERSON^* IN

^*SEE INSTRUCTIONS BEFORE FILLING OUT!

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The following constitutes Amendment No. 5 (“Amendment No. 5”) to the Schedule 13D filed by the undersigned. This Amendment No. 5 amends the Schedule 13D as specifically set forth.

Item 3 is hereby amended and restated to read as follows:

The aggregate purchase price of the 12,456,300 Shares owned by Steel Partners II is $130,923,984, including brokerage commissions. The Shares owned by Steel Partners II were acquired with partnership funds.

Item 4 is hereby amended to add the following:

On June 29, 2007, Steel Partners II delivered a letter to the Issuer recommending that the Issuer capitalize on its operating momentum and utilize the strength of its balance sheet to pursue a public recapitalization through a self tender for at least $850 million of the Shares at a recommended price of $17.50 per Share. Steel Partners II also states in the letter that if the Issuer is unwilling to pursue a recapitalization at this time, it recommends that the Issuer take all immediate steps necessary to fully explore other strategic alternatives for maximizing shareholder value, including an outright sale. Steel Partners II anticipates it would participate in any such sales process. Steel Partners II also furnished to the Issuer a presentation on its recapitalization proposal. A copy of the letter and the presentation are attached as exhibits hereto and are incorporated herein by reference.

Item 5(a) is hereby amended and restated to read as follows:

(a) The aggregate percentage of Shares of Common Stock reported owned by each person named herein is based upon 125,180,385 Shares outstanding, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q for the period ended March 31, 2007, as filed with the Securities and Exchange Commission on May 1, 2007.

As of the close of business on June 28, 2007, Steel Partners II beneficially owned 12,456,300 Shares, constituting approximately 9.95% of the Shares outstanding. As the general partner of Steel Partners II, Partners LLC may be deemed to beneficially own the 12,456,300 Shares owned by Steel Partners II, constituting approximately 9.95% of the Shares outstanding. As the sole executive officer and managing member of Partners LLC, which in turn is the general partner of Steel Partners II, Mr. Lichtenstein may be deemed to beneficially own the 12,456,300 Shares owned by Steel Partners II, constituting approximately 9.95% of the Shares outstanding. Mr. Lichtenstein has sole voting and dispositive power with respect to the 12,456,300 Shares owned by Steel Partners II by virtue of his authority to vote and dispose of such Shares.

Item 7 is hereby amended to add the following exhibits:

Letter from Steel Partners II, L.P. to IKON Office Solutions, Inc., dated June 29, 2007.

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IKON Office Solutions, Inc. Proposed Recapitalization Presentation of Steel Partners II, L.P., dated June 2007.

Powers of Attorney.

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SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: June 29, 2007	STEEL PARTNERS II, L.P.


	By:	Steel Partners, L.L.C.
		General Partner


	By:	/s/ Warren G. Lichtenstein

		Warren G. Lichtenstein
		Managing Member

	STEEL PARTNERS, L.L.C.


	By:	/s/ Warren G. Lichtenstein

		Warren G. Lichtenstein
		Managing Member


	/s/ Warren G. Lichtenstein

	WARREN G. LICHTENSTEIN

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EXHIBIT INDEX

	Exhibit	Page

1.	Joint Filing Agreement by and among Steel Partners II, L.P., Steel Partners, L.L.C. and Warren G. Lichtenstein, dated January 20, 2005 (previously filed).	—

2.	Letter from Steel Partners II, L.P. to IKON Office Solutions, Inc., dated June 29, 2007.	9 to 10

3.	IKON Office Solutions, Inc. Proposed Recapitalization Presentation of Steel Partners II, L.P., dated June 2007.	11 to 19

4.	Powers of Attorney.	20 to 22

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June 29, 2007

Mr. Matthew J. Espe
Chairman and Chief Executive Officer
IKON Office Solutions, Inc.
70 Valley Stream Parkway
Malvern, Pennsylvania 19355

Dear Matthew:

I appreciate the opportunity to have had several candid and open discussions with you and Bob over the last few months. As you know, Steel Partners II, L.P. ("Steel") is the third largest shareholder of IKON Office Solutions, Inc. ("IKON" or the "Company"). We beneficially own 12,456,300 shares, or approximately 10% of the outstanding common stock of the Company. We began investing in the Company over three years ago because we believed and continue to believe that the Company is a true leader in the document management and solutions industry, which has the potential to greatly improve profitability.

We commend management for its efforts that have resulted in improved operating margins and a simplified capital structure. We also recognize and commend the Company for expanding the Company's existing share repurchase program. However, we believe that the Company's common stock continues to trade below its intrinsic value and your balance sheet remains highly inefficient. We therefore recommend that the Company capitalize on its operating momentum and utilize the strength of its balance sheet to pursue a public recapitalization at $17.50 a share. This represents a 20% premium to the 20-day closing average of the shares.

With the Company's excess cash and a conservative debt financing package, the Company should be in a position to self tender for at least $850 million of common stock, or approximately 39% of its outstanding shares at the aforementioned price per share. Based on our discussions with several leading investment banks, we believe this refinancing is highly achievable in a short period of time.

The proposed recapitalization would provide immediate liquidity at a meaningful premium to the current share price for your shareholders who elect to tender. We believe it will be well received by the shareholders who desire liquidity. It would also be accretive immediately, and more so in the long term. As a long term shareholder, Steel would commit not to tender into this offer. Importantly, in addition to lowering the Company's cost of capital and enhancing its EPS growth, this recapitalization would result in a strong and flexible balance sheet that would support the Company's long term strategic vision.

We have enclosed for your review a brief summary of the proposed transaction which includes an estimate of IKON's EPS and implied share prices at various valuations with and without a recapitalization. Clearly, if management believes it will achieve its business plan, shareholders will be significantly better off if the Company changes its capital structure and executes the recapitalization.

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If the Company is unwilling to pursue a recapitalization now, we strongly recommend that IKON and its Board take all immediate steps necessary to fully explore other strategic alternatives for maximizing shareholder value. In particular, we believe the Company is ideally situated for an outright sale and that a sale process could result in the Company receiving offers from financial and strategic buyers at a premium to the current market price. Steel anticipates it would participate in any such sale process. Based upon substantive discussions with financing partners, Steel believes that it could obtain all necessary financing commitments within a very short period of time.

We look forward to continuing discussions with you and the other members of the Board on enhancing shareholder value. We trust that the best interests of all shareholders will continue to remain of paramount importance.

	Respectfully,


	Warren G. Lichtenstein

CC: Board of Directors

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POWER OF ATTORNEY

Know all by these presents, that each of the undersigned hereby constitutes and appoints Lauren Isenman signing singly, the undersigned’s true and lawful attorney-in-fact to:

1. execute for and on behalf of the undersigned all documents relating to the business of Steel Partners II, L.P. including, but not limited to, all filings with the Securities and Exchange Commission, any stock exchange and any other regulatory, administrative or similar authority, and all memoranda, correspondence, communications or the like, except that such attorney-in-fact shall have no power to execute any document that has the effect of creating a financial commitment or financial obligation of Steel Partners II, L.P. or its affiliates.

2. do and perform any and all acts for and on behalf of the undersigned that may be necessary or desirable to complete and execute any such document, complete and execute any amendment or amendments thereto, and timely file such document with the appropriate authority.

3. take any other action of any type whatsoever in connection with the foregoing which, in the opinion of such attorney-in-fact, may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by such attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorney-in-fact may approve in such attorney-in-fact’s discretion.

The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite, necessary, or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such attorney-in-fact, or such attorney-in-fact’s substitute or substitutes, shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. The undersigned acknowledges that the foregoing attorney-in-fact, in serving in such capacity at the request of the undersigned, is not assuming any of the undersigned’s responsibilities to comply with any rules or regulations including federal securities laws.

This Power of Attorney shall remain in full force and effect until December 31, 2007 unless earlier revoked by the undersigned in a signed writing delivered to the foregoing attorney-in-fact.

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of this 27th day of December, 2006.

STEEL PARTNERS II, L.P.		STEEL PARTNERS II, L.P.

By:	Steel Partners, L.L.C.	By:
	General Partner
			Warren G. Lichtenstein
			Managing Member

By:

	Warren G. Lichtenstein
	Managing Member	Warren G. Lichtenstein

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POWER OF ATTORNEY

Know all by these presents, that each of the undersigned hereby constitutes and appoints Jack L. Howard signing singly, the undersigned’s true and lawful attorney-in-fact to:

This Power of Attorney shall remain in full force and effect until December 31, 2007 unless earlier revoked by the undersigned in a signed writing delivered to the foregoing attorney-in-fact.

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of this 27th day of December, 2006.

STEEL PARTNERS II, L.P.		STEEL PARTNERS II, L.P.

By:	Steel Partners, L.L.C.	By:
	General Partner
			Warren G. Lichtenstein
			Managing Member

By:

	Warren G. Lichtenstein
	Managing Member	Warren G. Lichtenstein

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POWER OF ATTORNEY

Know all by these presents, that each of the undersigned hereby constitutes and appoints Steven Wolosky signing singly, the undersigned’s true and lawful attorney-in-fact to:

This Power of Attorney shall remain in full force and effect until December 31, 2007 unless earlier revoked by the undersigned in a signed writing delivered to the foregoing attorney-in-fact.

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of this 27th day of December, 2006.

STEEL PARTNERS II, L.P.		STEEL PARTNERS II, L.P.

By:	Steel Partners, L.L.C.	By:
	General Partner
			Warren G. Lichtenstein
			Managing Member

By:

	Warren G. Lichtenstein
	Managing Member	Warren G. Lichtenstein