Dayton Hudson Corp. yesterday again rebuffed the bid for the company by Washington's Haft family, saying it was not in its interest to sell to the Hafts or "other speculators."
The announcement did not deter the Hafts. Minutes after the rejection they said they would press ahead in their attempt to buy the nation's sixth-largest department-store operator by launching a proxy fight to oust the existing board of directors.
"We will diligently pursue our efforts to call a special meeting of shareholders for the purpose of replacing Dayton Hudson's entire board," said Robert Haft, who with his father Herbert Haft heads the Landover holding company Dart Group Corp.
Following a day-long board meeting, Dayton Hudson's directors sharply criticized the Hafts' latest bid. Although the bid represented a $300 million increase over their initial, unsolicited $6 billion bid for the company, Dayton Hudson said it was inadequate.
"We do not believe that Dart has the ability to put the financing in place to acquire Dayton Hudson," Dayton Hudson's chairman Kenneth A. Macke said in a sharply worded, two-page statement.
The financial plan briefly outlined by the Hafts' investment adviser PaineWebber Inc. in documents filed with the Securities and Exchange Commission is "highly contingent and riddled with qualifications," Macke said.
Noting that Dart Group Corp. bought and sold large chunks of Dayton Hudson stock over the past six months, Macke accused the Hafts of trying "to make a profit solely for Dart ... The Dart Group looks like a speculator and an arbitrageur to us."
Dayton Hudson said that it had no plans now to take defensive measures to ward off the Hafts. Frequently companies receiving unsolicited takeover bids restructure their finances or organization, find more friendly buyers or buy other firms to make a takeover more costly.
But Dayton Hudson yesterday said, "We do not intend to restructure, recapitalize or reorganize."
Dayton Hudson's rejection was not unexpected. Ever since the Hafts first approached the retailer last summer, the company has made it clear it wanted to remain independent. First, it won emergency legislation from the state of Minnesota to make it harder for corporate raiders to take over any Minnesota company in an unfriendly bid. Then, Dayton Hudson turned down the Hafts' first official offer of $65 a share.
The Hafts' are now offering $68 a share. But Wall Street has clear doubts about the Hafts' ability to win the company, as the stock has never traded close to $68. Yesterday, the stock closed at $52.87 on the New York Stock Exchange, down $1.62.
Robert Haft said Dart would launch its proxy fight as soon as the SEC clears the material it submitted to the agency late last month. "We remain firmly committed to buying Dayton Hudson ... We believe the financing for the purchase of Dayton Hudson is available," he said. Responding to Dayton Hudson's accusation that Dart was making its bid solely for speculation and profits, Haft added that Dart sold most of its 2 percent stake in Dayton Hudson last June after the Minnesota takeover law was passed.
"Our preliminary analysis was that the legislation would make it impractical or impossible to acquire Dayton Hudson. On further analysis, we've concluded this is not the case." The Hafts began buying again, and own about 4.9 percent of the stock.