Batus Inc., the company that owns Saks Fifth Avenue and Gimbel's deparment stores, agreed yesterday to buy Marshall Field & Co. for $310 million to keep the Chicago retailer out of the hands of corporate raider Carl Icahn.
After a day-long meeting on Monday, Field's board accepted an offer of $25.50 a share from Batus, the American subsidiary of London-based BAT Industries, the former British American Tobacco Co.
Icahn, who owns almost 30 percent of Field stock, denounced the agreement soon after it was announced, claiming the price offered by Batus was too low. Field turned down a $42-a-share bid a couple of years ago from Carter Hawley Hale, which owns Neiman-Marcus and other stores, Icahn pointed out.
Icahn's immediate rejection of the Batus offer set the stage for a continuing fight for Field, one of a handful of big independent department store companies.
Icahn and several partners who've previously been involved in strong-arm takeover tactics began buying stock in Marshall Field a few months ago, warning they might ask for seats on the board of directors or try to take control of the company.
The unexpected intrusion forced Field Chairman Angelo Arena to start looking for a more compatable merger mate. In the past, Field has discussed merging with Woodward & Lothrop of Washington, but the threat from Icahn left Arena no alternative but to seek affiliation with a bigger firm capable of outbidding Icahn if necessary.
Based in Louisville, Batus is the U.S. holding company for subsidiaries of London-based BAT Industries, the third-largest industrial company in the United Kingdom with sales last year of $16 billion. The U.S. operations of BAT include a retail division made up of Saks, Gimble's and Kohl's, a Wisconsin food chain; the Appleton Paper Co. and the Brown & Williamson tobacco company.
The U.S. companies had total sales of more than $4 billion in fiscal 1980 and produced a $197 million profit.
Unlike most mergers, which begin with a tentative agreement then progress to a definitive deal some time later, the Field-Batus combination was finalized the first day and approved by the boards of both companies.
Icahn, however, could still make a higher bid for Field or seek to block the merger through court action.
Batus said it is planning to buy at least 50 percent of Field stock through a public offering, then to merge the two companies.
The agreement calls for Batus to make a public tender offer for the equivalent of 8 million shares of common stock. Batus will pay $25.50 for the common shares and $45.90 for preferred stock convertible into common shares.
If Batus succeeds in buying at least 50 percent of Field stock, the companies then will be merged. If the merger cannot be completed, however, the agreement contains provisions that would make Field less attractive to another buyer.
If the merger falls through, Batus will still have the right of first refusal to buy any Field operations or real estate that are offered for sale.