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Developer Wants to Buy Up to 15% of Retailer : Trump Seeks Federated Stake

January 14, 1988|Associated Press

CINCINNATI — Developer Donald Trump has asked the federal government for clearance to buy up to 15% of Federated Department Stores Inc. stock, the retailer announced Wednesday.

Trump is seeking Securities and Exchange Commission permission under federal antitrust law to buy at least $15 million of the company's stock, and has told the government that he may acquire 15% or more of the retailer's 89.65 million outstanding shares, Federated said in a statement.

The Federated announcement came one day after Trump withdrew his offer to buy control of Resorts International Inc.

Federated, the nation's fifth-largest retailer, said it does not know whether Trump currently owns any of its stock.

The retailer said it has ended negotiations with Trump over undisclosed real estate ventures because of his request for government clearance.

"The potential conflict in dealing with Trump under such circumstances has all the evils of 'greenmail,' " Federated said, referring to the practice in which an investor buys stock in a company and then sells back to the firm at a premium above the market price.

Federated spokeswoman Carol Sanger said the company had no further comment.

Norma Foerderer, a spokeswoman for Trump, said the developer was out of town and could not be reached for comment late Wednesday, shortly after Federated made its announcement.

Trump decided to withdraw his $15-a-share offer for all shares of Resort's Class A common stock after a special committee appointed by the company's board of directors voted not to recommend approval of Trump's proposal.

Trump owns three casinos in Atlantic City, N.J., as well as a number of properties in New York.

If Trump owns or buys Federated stock, it would not be the first time he has put together a major stake in a retailer. An investor group including Trump holds 21.4% of Alexander's Inc., a 14-store chain of department stores in the New York area.

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