Shareholders Approve Sale of Younkers to Proffitt
DES MOINES, Iowa (AP) _ Sale of Younkers Inc., a 140-year-old Midwest department store chain, to Proffitt’s Inc. in a stock transaction valued at about $218 million was approved Friday by shareholders of both retailers.
Younkers becomes a division of Proffitt’s, which has 54 department stores in the Southeast. Younkers has 51 stores in the Midwest. The two chains have similar operations, focusing on shopping malls in small to medium-sized cities.
The sale to the Knoxville, Tenn.-based Profitt’s is to take effect at midnight Saturday.
Each share of Younkers stock is being exchanged for 0.98 share of Proffitt’s stock. In trading Friday afternoon on the Nasdaq market, Younkers was up 87 1/2 cents at $24 a share and Proffitt’s rose $1.25 to $24.75.
The sale had been endorsed by Carson Pirie Scott & Co., a Milwaukee retailer that earlier had launched a hostile takeover bid for Younkers and wound up owning nearly 12 percent of Younkers’ stock.
Younkers’ chairman, Thomas Gould, said the sale is in the best interest of Younkers shareholders and is ``the inevitable next step″ for the Des Moines-based company that has roots going back to 1856.
``The combined company will be better able to compete in the ever-consolidating retail industry,″ Gould said.
Gould has called the deal a merger of equals and has tried to reassure local investors that Younkers will retain its name and flagship store in downtown Des Moines. The fate of about 570 jobs at Younkers headquarters in Des Moines remains uncertain, however, because Proffitt’s is likely to consolidate administrative jobs.
Younkers vice president Alan Raxter said no consolidation decisions have been made.
Proffitt’s said last month that combining the companies will save more than $10 million in annual costs instead of the $6 million in savings it estimated when the sale plan was announced in October. Proffitt’s has not provided details of the savings.