A representative of the Limited Inc. and Edward J. DeBartolo Corp. said Friday that the companies intend to launch their $1.77-billion tender offer for Carter Hawley Hale Stores on Monday as planned, despite the opposition of the Los Angeles-based retailer's largest shareholder.
"Nothing has changed," Limited spokesman Alfred Dietzel said, adding that the $55-per-share bid "will proceed" despite the opposition of General Cinema Corp., which owns preferred shares convertible to 38.6% of Carter Hawley Hale common stock.
Officials at Carter Hawley Hale again declined comment on the Limited statement or on any other aspects of the takeover battle, only reiterating that they will consider the Limited-DeBartolo offer "in appropriate fashion." Carter Hawley Hale's board is scheduled to meet Wednesday.
Cannot Win Without General Cinema
The statement by the Limited was the latest salvo is what is expected to be a drawn-out and possibly bitter takeover battle. Analysts say the Limited-DeBartolo partnership, called Retail Partners, cannot succeed unless it wins the support of Chestnut Hill, Mass.-based General Cinema, the nation's largest theater chain and a major soft-drink bottler.
However, speculation spread Friday on Wall Street and in retailing circles that the Limited, a retailer based in Columbus, Ohio, and DeBartolo, a major shopping center developer based in Youngstown, Ohio, might launch their tender offer Monday with a higher price--possibly as high as $65--to satisfy General Cinema.
Retail Partners also might offer to buy General Cinema's stake at a higher price than will be offered to other Carter Hawley Hale shareholders, some analysts suggested. However, it wasn't clear whether such a maneuver would be possible under an agreement between the Los Angeles-based retailer and General Cinema limiting the theater company's ability to sell its stake.
"The Limited is totally committed, and they must have had some communication with General Cinema and know what its price is," said one Wall Street speculator who bought and sold Carter Hawley Hale stock this week.
Reflecting such speculation, the price of Carter Hawley Hale stock rose to as high as $54 per share in New York Stock Exchange trading Friday before closing at $52.875, up $1.375.
Speculation also centered on possible takeover defenses that Carter Hawley Hale might be considering. The Los Angeles retailer successfully defeated a bitter takeover bid by the Limited in 1984 by using a number of takeover defenses, including buying back some of its stock and enlisting General Cinema as a "white knight."
"You could say there will be a strong counteroffensive," one source close to Carter Hawley Hale management said Friday. The company "won't go down without a tremendous fight."
"There are a lot of things they can do" said Robert F. Buchanan, retailing analyst at Dillon, Read & Co. "It's a big guessing game."
Philip M. Hawley, Carter Hawley Hale's chairman and chief executive, has declined requests for an interview. A company spokesman, who earlier Friday had told a Times reporter that the executive might be available, said later in the day that Hawley was tied up in meetings.
One possible takeover defense, analysts and sources suggested, would be a leveraged buyout under which Carter Hawley Hale management would buy out the company's shareholders by topping Retail Partners' offer. Other possible defenses, they suggested, include a stock buyback, an acquisition that would raise Carter Hawley Hale's already high debt level, or sales of assets, possibly to the Limited or DeBartolo.
Limited Chairman Leslie H. Wexner is known to be interested primarily in acquiring Carter Hawley Hale's Neiman-Marcus and Bergdorf Goodman luxury store chains. DeBartolo is said to want some or all of Carter Hawley Hale's Broadway, Weinstock's and Emporium Capwell department store chains to anchor its future shopping malls.