Washington's Haft family yesterday said it was interested in buying Chief Auto Parts, one of the nation's largest specialty retailers of auto parts, to expand the Hafts' Trak Auto Corp. chain.
Now owned by Southland Corp., the 465-store Chief Auto chain is one of several Southland companies scheduled to be sold to finance a previously announced $5 billion leveraged buyout by Southland's management.
An acquisition of Chief Auto Parts would allow Trak -- a 212-store chain that sells automotive parts at discount prices in the Washington area, Richmond, Chicago and throughout California -- to expand into new areas, particularly Texas and other parts of California where Trak is not now located.
Southland yesterday said it hoped to begin soliciting bids shortly for Chief Auto Parts, as well as for Southland Dairies, Reddy Ice, the world's largest manufacturer of crushed ice, and several other operations.
"There have been dozens of inquiries about all of the businesses for sale," said Markeeta McNatt, a spokeswoman in Southland's investor relations department. Southland is reported to be seeking about $120 million for Chief Auto.
A spokesman for the Haft family said the Hafts were among those expressing interest in Chief Auto Parts.
The Hafts control 66 percent of Trak Auto stock through Dart Group Corp., which the Hafts run and control.
"They have told Southland they want the sales documents as soon as they are available," said Stan Rubenstein, spokesman for the Hafts.
In fact, Rubenstein said, the Hafts made an unsolicited bid for Chief Auto before the leveraged buyout was announced in early July. That, in turn, may have prompted a Wall Street rumor that the Hafts were buying Southland stock with an eye toward buying the company, causing the price of Southland stock to jump.
The Hafts, who usually refuse to comment on reports that they are interested in acquiring a particular company, denied the rumor at that time. But Southland stock remained volatile on takeover rumors, prompting Southland's management to arrange a leveraged buyout to avoid a takeover by another company.
As a result, the Haft's bid for Chief Auto was suspended, but the Hafts have told Southland they remain interested in buying the auto-parts chain.
Financial analysts yesterday said a merger of the two chains would be a good fit because they run similar operations: small stores in convenient neighborhood shopping centers. Trak, however, offers discount prices, where Chief Auto does not.
"They run very similar types of stores," said Fred Wintzer of Alex. Brown Co., adding that Trak Auto could improve its productivity by buying Chief Auto.
Wintzer said Chief Auto has never lived up to the expectations of Southland, which bought the chain in 1978. Both chains had disappointing returns in the early 1980s, as expansion and increased competition took a toll on the bottom line.
But with improved cost control measures in the case of Chief Auto and sales increases in Trak Auto's West Coast subsidiaries, the financial conditions of both Trak Auto and Chief Auto improved last year.
An acquisition of Chief Auto would be a far smaller takeover than some of the other retailing conquests Dart has tried to make in the past three years.
Dart had considered making bids for May Department Stores Corp., the nation's third-largest department store operator, and Jack Eckerd Corp., the nation's second-largest drugstore chain.
Dart made a $3.9 billion bid for the world's largest supermarket chain, Safeway Stores Inc., only to be thwarted by Safeway when it arranged a leveraged buyout by management.
Most recently, Dart has expressed an interest in buying Dayton-Hudson Corp., the nation's sixth-largest department store operator.
Sources close to the Hafts say Dart's interest in Dayton-Hudson remains and would not be affected by an acquisition of Chief Auto Parts.