The Herbert H. Haft family -- founders of Dart Drug, Crown Books and Trak Auto -- has bought 6 percent of the stock of Safeway Stores Inc. and is considering trying to take over the nation's largest grocery-store chain.
The Washington Hafts, who have tried four times in the last two years to take over a big company, paid $149.5 million for 3.6 million shares of Safeway stock, according to a document filed with the Securities and Exchange Commission.
The stock was acquired "with a view toward the possibility of acquiring all of or a majority interest in" Safeway, the document said. Safeway, with annual sales of $19.6 billion, represents the biggest company the Hafts have gone after. It is nearly 50 percent larger than Beatrice Cos. Inc., which the Hafts unsuccessfully tried to buy last November.
The SEC document was filed by Garden Partnership, a newly created partnership of two Haft family companies. One is Dart Group -- which owns 66 percent of Trak Auto Corp. and 34 percent of Crown Books Corp. The other is Combined Properties Limited Partnership, which owns and operates the Hafts' real estate holdings, including two dozen local shopping centers. According to the SEC papers, Dart Group owns 95 percent of Garden Partnership, which was created for the specific purpose of "acquiring and evaluating" Safeway's stock.
Haft was unavailable for comment, and Safeway officials declined to discuss the SEC filing. "We haven't had a chance to review the filing," said Safeway's chief financial officer, Harry D. Sunderland.
He said Safeway recently adopted an antitakeover provision to ward off any unfriendly acquisition. "Anyone who is attempting to acquire this company should know they are acting at their peril," Sunderland said.
Wall Street investors who closely monitor Dart predicted that Haft would try to make a serious bid for Safeway but would not succeed. "I think they are going to try to buy Safeway," said an investor who declined to be named. "But I bet you that he is not going to be able to buy it . . . ," the investor added. Safeway either will try to buy out the Hafts or ask another company or investment group to buy the company to ward off the Hafts, the investor predicted.
The SEC document confirmed weeks of speculation on Wall Street that Dart had bought a large stake of Safeway. Rumors began after a large block of Safeway stock -- three million shares -- was traded on May 15. The day before, only 250,000 shares were traded -- a little more than average for the company, company officials said.
Under SEC rules, investors are not required to report their purchases of a company's stock until they buy 5 percent of the outstanding shares. According to the SEC documents, the Haft partnership bought the original block of shares at $40.38 a share. The company continued to buy shares up through yesterday when it bought 17,000 shares for $45.75 apiece. Safeway stock closed yesterday at $45.68 a share on the New York Stock Exchange.
In the past two years, Haft has made it repeatedly clear -- in word and deed -- that he wanted to buy a retailing company to replace the 73-unit drugstore chain that Dart sold two years ago for $160 million. In addition to the cash it received for the sale of its drugstores, Dart Group recently raised $250 milion in debentures, saying it wanted to use that money to fund a takeover.
Pharmacist Herbert Haft, 65, founded Dart as one of the first discount drug chains. His son Robert, 34, expanded the family retailing empire by launching Crown Books and Trak Auto. Herbert Haft's wife Gloria heads Combined Properties, which owns many of the shopping centers in which Dart, Crown and Trak stores are situated.
The Hafts have made a number of unsuccessful attempts to buy other major retailing companies. A year ago, they made a bid for The May Co. (the parent firm of The Hecht Co.) and then tried to buy Jack Eckerd Corp., the nation's second-largest drugstore chain. In both instances, the takeovers failed, but the Hafts made substantial profits when they sold the stock.
Last November, Dart made a last-minute $5.2 billion bid for Beatrice, but Beatrice instead accepted the offer of its initial suitor, Kohlberg Kravis Roberts & Co.
In April, Haft made a bid to join the $1.16 billion buyout of Revco D. S. Inc., which is based in Ohio and is the nation's third-largest drugstore chain, only to be rebuffed again.