Younkers Shareholders Side With Hostile Takeover Bid
DES MOINES, Iowa (AP) _ Shareholders of Younkers Inc. replaced three of its nine board members and approved a resolution suggesting the department store chain be sold, a preliminary count of ballots showed Friday.
The ballots, cast May 17, were part of a hostile takeover effort by Carson Pirie Scott & Co., a Milwaukee-based competitor that has thus far been rebuffed by Younkers managers.
Among those kicked off the board and replaced with Carson sympathizers were Younkers’ president Tom Gould.
Carson president and CEO Stanton Bluestone said Friday the sale of the 53-store chain is now inevitable.
``By electing Carson’s nominees and approving Carson’s `Put Younkers up for sale’ resolution, Younkers shareholders have unequivocally demanded that the Younkers board start a process which should lead to the sale of Younkers to the highest bidder. I expect the Younkers board to expeditiously begin this process,″ he said.
Younkers management remained defiant.
``We’ll run the business with the same diligence we have in the past. This doesn’t give them a majority. Let’s make it clear to the public, the company has not been sold,″ said Alan Raxter, Younkers’ chief financial officer.
``While we are disappointed, the management of Younkers continues to believe that the auction of the company, given Younkers’ turnaround, is not in the best interest of the company and its shareholders,″ Gould said in a written statement.
The preliminary vote count was revealed to both sides by an independent auditor, Corporation Trust Co. of Wilmington, Del. Younkers will make a formal declaration at a meeting June 2.
Younkers managers have said that Carson’s offer of $19 a share, or about $170 million, is too low. Its shares gained 12 1/2 cents Friday to close at $18 on the Nasdaq Stock Market, a price well below the Carson offer, indicating investors are skeptical about whether it will succeed.
Mike MacDonald, executive vice president and chief administrative officer of Carson, said Carson’s three director candidates garnered votes of stockholders representing between 54 percent and 58 percent of the shares for which ballots were cast. Incumbents got 42 percent to 46 percent, he said.
The resolution asking that the company be sold got 56 percent, he said.
``It was a consistent vote regardless of whether you’re talking about the directors or the nonbinding resolution.″
But Gould noted that only 80 percent of the shares outstanding were voted, leaving a question mark about what would happen if all stockholders cast ballots.
Raxter, the CFO, said the six remaining board members loyal to Younkers have been solidly in favor of the company’s no-sell stand.
``The board will certainly consider the resolution, but it’s not a mandate to put the company up for sale,″ he said.
Younkers has 53 stores in Iowa, Nebraska, Minnesota, Illinois, South Dakota, Wisconsin and Michigan. Carson has 53 stores in Illinois, Indiana, Minnesota and Wisconsin.