Done Deal: Federated merges with May
Staff -- Home Accents Today, 9/1/2005 12:00:00 AM
Cincinnati, Ohio-based Federated Department Stores has completed its merger with St. Louis, Mo.-based May Department Stores Company. The merger became effective Aug. 30.
Under terms of the agreement, May shareholders will receive $17.75 in cash and 0.3115 shares of Federated common stock for each share of May Company common stock.
"Today is a landmark day in the history of our company. Two great organizations have come together, and we see tremendous opportunity ahead," said Terry J. Lundgren, Federated's chairman, president and CEO. "We see opportunity to bring distinctive fashion and affordable luxury to our customers, opportunity for our people to grow and develop, opportunity to increase shareholder value, and opportunity to be a stronger partner for our communities.
"We will be meeting with the May Company organization and continuing to learn more about its business so we can make the best possible long-term decisions. In the short term, we are firmly focused on serving customers and delivering results through the holiday selling season."
Federated expects to operate all May Company stores under their existing nameplates at least through the end of 2005. Conversion of most May Company locations to the Macy's nameplate is expected in fall 2006, consistent with Federated's announcement of July 28. Also as previously announced, divestiture of duplicate May Company and Macy's locations will begin in 2006.
Federated reiterated its pledge to May Company associates that there will be no workforce reductions or job eliminations as a result of the merger prior to March 1, 2006. Consistent with previous announcements, a cash dividend of 25 cents per share will be paid on Oct. 3, 2005 to Federated shareholders of record as of the close of business on Aug. 29, 2005. A cash dividend of 24.5 cents will be paid on Sept. 15, 2005, to May Company shareholders of record as of the close of business on Aug. 29, 2005.
The company said it has identified an additional seven duplicate stores in California, New York and Massachusetts it intends to divest in 2006, including one Filene's, two Lord & Taylor stores, and four Macy's West stores. These stores join a list of 68 slated for closing and account for approximately $2.1 billion in 2004 sales. Federated reiterated its intention to comply with all existing lease and operating agreements.
Once duplicate stores are divested, their workforces will be integrated into nearby Macy's and/or Bloomingdale's stores. The company expects to employ all management personnel in good standing from all stores and to offer positions to the vast majority of associates.
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Done deal: Federated merges with May
Sep 6, 2005
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