Unable to get the officers of Marshall Field and Co. to negotiate a merge, Carter Hawley Hale yesterday went to the stockholders, offering to buy their stock for almost twice what it was worth before the merger bid began.
Carter Hawley Hale, the $1.4 billion Los Angeles retail giant that owns Neiman Marcus, served notice it would offer cash and stock woth $380 million for the big Chicago department store chain.
The offer amounts to just under $42 per share for Marshall Field stock that traded for $22.75 the day before Carter Hawley Hale initiated take-over plans in mid-December, with a $36 per share opening bid.
Thre was no response yesterday from executives of Marshall Field who answered the original offer with a blunt rejection, cries of outrage and threatened lawsuits.
Carter Hawley Hale's tender proposal, filed with the Securities and Exchange Commission, raised its $325 million opener by $55 million. The original bid had been dismissed as "inadequate" by Marshall Field President Angelo Arena, a former Carter Hawley Hale executive.
Trading in both securities was suspended yesterday because of the proposal. Marshall Field shares, which have climbed steadily since the merger bid began, closed Tuesday at closed at $17.6
If the $610 million-a-year Marshall Field operation were merged with the $1.4 billion Carter Hawley Hale, a $2 billion-a-year business would be created. It would be the third largest department store group, behind Federated Department Stores, which owns Bloomingdales here, and The May Department Stores, parent of The Hecht Company.
It would be one of the biggest retailing mergers ever. Marshall Field is one of the last big independent department stores and had been the target of previous suitors.
Carter Hawley Hale's notice said it, "has been interested in negotiating a merger with Marshall Field for several years." Almost immediately after Arena left Carter Hawley Hale last year to run Field's, his old bosses began pressuring for merger talks.
The merger bid will be delayed at least 60 days by an Illinois take-over law, designed to help companies stall unfriendly offers, Carter Hawley executives admitted.
Marshall Field had already buttressed itself by filing an anti-trust lawsuit against Carter Hawley. The suit claimed the merger would lessen retail competition in the Chicago area, where Carter Hawley has one Nieman Marcus store and others planned.
Field's agreed last month to buy five Liberty House stores in the Pacific Northwest, which also compete with Carter Hawley Hale operations, complicating the antitrust issue.
Carter Hawley's spokesman insisted there is no antitrust barrier to the merger, and touted the benefits of the combination to Field's. The merged company would have greater geographic diversity and because of its size would be better able to attract top talent, said Eaton Ballard, Carter Hawley's acquisition consultant and a retired executive vice president of the company.
"We also are convinced that we can improve the operating margins of Marshall Field, which in recent years have been less than those achieved by our department-store divisions," said Ballard.
"We would hope we could show considerable improvement," said Ballard of Field's $182 million profits last year.