Carter Hawley Hale Stores, Inc., yesterday tried to take over Marshall Field & Co. of Chicago but was greeted with a lawsuit rather than a welcome mat.
Marshall Field said an acquisition by Carter Hawley Hale would violate U.S. antitrust laws, and asked a federal court in Chicago to stop it.
One of the last of the large, independent department stores, Marshall Field has seen its profits shrinking for four consecutive years and has long been considered an acquisition candidate.
The merger of the $600 million a year Marshall Field and the $1.5 billion Carter Hawley Hale is one of the biggest ever proposed in retailing. Carter Hawley Hale's stores include Neiman Marcus, The Broadway and Walden Books.
The merger was proposed formally yesterday morning in a letter from Carter Hawley Hale president Phillip Hawley.
As "a basis for negotiation," he offered $36 a share for Marshall Field's common stock, which closed Friday at $22.75. The stock did not trade yesterday because of the proposal.
Hawley said his company was willing to pay cash for up to 49 per cent of Marshall Field's shares and would acquire the remainder through an exchange of stock.
Hawley's offer went to Marshall Field's new president Angelo R. Arena, who until two months ago worked for Carter Hawley Hale as chairman of Neiman Marcus.
Arena had been hired as president and chief operating officer, but became the top man at Field's after the sudden death of chairman Joseph A. Burnham in October.
Both companies issued terse statements about the proposed merger and said Securities and Exchange Commission regulations prevented them from further comment.
Hawley noted that Marshall Field management had "thus far been unwilling to enter into negotiations." His announcement indicated that Carter Hawley Hale was making an unfriendly takeover bid.
Wall Street retail analysts, however, suggested that the bid might not be as unfriendly as it looks. They cited Arena's long association with Carter Hawley Hale, the $36 price - a better than 50 per cent premium - and the repeated reports that Marshall Field would merge with someone.
Marshall Field was courted unsuccessfully last year by Dayton Hudson Corp., the Minneaspolis-based retailer.
Since 1972, Marshall Field's earnings have slipped every year. From the peak of $21 million, or 4.4 per cent of sales, profits were down to $18.1 million, or 3 per cent of sales last year.
To halt the slide, the company has been unloading some unprofitable real estate holdings. Recently, it sold most of its interest in the new Ritz-Carlton Hotel in water Tower Place, a downtown Chicago development.
Built as Chicago's most luxurious hotel, the Ritz-Carlton was less than half full during its first six months and cost Marshall Field $2 million. Marshall Field still owns an interest in Water Tower Place, which it says will continue to lose money this year.