The price of Marshall Field & Co. stock plunged on the New York exchange yesterday after the Chicago department store chain announced expansion plans that appeared to dim the prospects of a merger with Carter Hawley Hale Inc.
Marshall Field said it is setting up a new division to operate stores in the South, and will open its first Sunbelt outlet in Houston.
Because the two companies are competitors, a merger would violate anti-trust laws, Marshall Field has contended in lawsuits aimed at blocking the takeover bid. Marshall Field spokesman yesterday insisted the plan to expand into Houston was not designed to add weight to the argument against a merger.
Whatever the motive, the announcement sparked strong selling of Marshall Field shares. The stock was the third most active issue and the second biggest loser on the NYSE, closing at 30 7/8, down 2 7/8 on trading of 301,800 shares.
The opening of trading in the stock was delayed about an hour because of large sell orders.
Trading in the $22 range in December when Carter Hawley Hale first publicly suggested a merger, Field stock moved steadily upward. Carter Hawley Hale offered the equivalent of $42 a share in a formal tender offer filed last week.
Marshall Field spokesman would not comment on the stock's decline, but sources close to the company said it blamed the fall on speculators who were counting on the tender offer eventually being accepted.
Field said its first southern store will be in Houston's Galleria shopping center, a posh suburban mall that is the namesake of Washington's Mazza Galleria where Neiman Marcus has a store.
Field reportedly has signed "a definitive letter of agreement" to build the Houston store and is negotiating with the same developers to build a second in a similar development in the Dallas area. Dallas is the hometown of Carter Hawley's Neiman-Marcus division.
The Chicago department store company said it has been planning the Texas store for months and was in the final stages of talks when the Carter Hawley Hale merger dispute broke.
Last month Field announced plans to acquire a group of stores in the Pacific Northwest, another market in which it would directly compete with a Carter Hawley Hale division. That acquisition produced complaints that Field was trying to create the appearance of competition to bolster the anti-competition arguments against a merger.