Dart Group Corp. yesterday ended its takeover bid for the nation's second-largest drugstore chain, Jack Eckerd Corp., by agreeing to sell back for $55.6 million all of the 1.9 million Eckerd shares Dart had acquired in early May.
The agreement gives Dart a $9 million profit from its $46.5 million foray, and more financial resources to the Herbert H. Haft family -- which runs Dart -- to bid for another company, financial analysts said yesterday.
"A large gun is rattling around again; we'll have to sit back and watch where it strikes next," said financial analyst Terence McEvoy of Smith Barney.
Eckerd agreed to pay Dart $29.50 a share -- the closing price as of Friday -- and to drop its suit to bar Dart from buying additional Eckerd stock. Following the announcement of the agreement yesterday, Eckerd stock fell 3 1/8 to close at 26 3/8 on 792,000 shares.
Dart began buying its Eckerd stock in May after the price plummeted following Eckerd's announcement that it expected disappointing profits for the latest quarter.
Dart purchased 5 percent of Eckerd's shares at an average price of $24.70. At the time, Dart said it was considering buying all of Eckard's shares -- a move Eckerd called "unwelcome."
Subsequently, Dart announced it had hired E. F. Hutton & Co. Inc. to act as its financial adviser in its move on Eckerd. At the time, Jacksonville, Fla.-based Eckerd owned its drugstore chain, with 1,511 stores around the country, plus VideoConcepts, the nation's largest chain of video stores, and JByrons, a Florida department store chain.
Dart indicated that if it bought the chain, it probably would spin off VideoConcepts -- which has been a drain on Eckerd's earnings since it was acquired in 1981 -- and JByrons.
Shortly after that announcement, Eckerd announced plans to sell both VideoConcepts and JByrons, but insisted the sale was planned before Dart made its move.
Nonetheless, financial analysts said the sell-off would provide Eckerd with extra cash to ward off any unfriendly takeover. Although Eckerd did not disclose the amount of money it expected to receive, analysts estimated the proceeds would exceed $200 million.
By buying back all of Dart's shares, Eckerd officials yesterday said they hoped they would end the threat of any hostile takeover moves on the company.
Financial analysts, however, still believe Eckerd is an attractive takeover target. "I think that Eckerd is still in play," said Jerome H. Kaplan, senior analyst for Value Line Investment Survey.
Noting that drugstore chains have been attractive takeover candidates in recent years, Kaplan said Eckerd is even more valuable now that it has disposed of its two unrelated chains. "It is now a pure play," active in very attractive high-growth markets in Florida and Texas, he said.
Dart officials were unavailable to comment on their agreement with Eckerd.
The purchase of Eckerd stock was the second move by the Haft family on another retailing company within the past six months. Last winter, Dart and Crown Books Corp. -- which is 34 percent owned by Dart and also run by the Haft family -- acquired a large chunk of stock in The May Department Stores Co., which owns a number of department store chains, including The Hecht Co.
The Hafts eventually sold their shares after May resisted Dart's preliminary takeover maneuvers. May arranged a real estate deal that would have made an unfriendly takeover difficult.
According to documents filed with the Securities and Exchange Commission, Dart has been looking at a number of possible acquisitions since last year, when the company sold its 73-unit drug store chain to the current management for $160 million.
"The Hafts are extremely uncommunicative," Kaplan said. "So you don't know where [Herbert] Haft is going to strike next, except it will be in retailing -- it is where he has a comfortable feel."