Younkers Agrees to Buyout by Tennessee Chain
DES MOINES, Iowa (AP) _ Younkers Inc., after fending off a year-long hostile takeover bid from Milwaukee retailer Carson Pirie Scott & Co., today accepted a $253 million buyout from Proffitt’s Inc.
The deal, which still requires shareholders’ approval, would make Younkers’ 53 department stores in the Midwest a division of Proffitt’s, a Knoxville, Tenn.-based department store chain with 54 stores in the Southeast.
In early trading today on the Nasdaq Stock Market, Younkers shares rose $2.93 3/4 to $22, while Proffitt shares slipped $5 to $23.75.
Proffitt’s said it expects to issue about 8.8 million shares of new stock to buy Younkers, acquiring each share of Younkers stock for 0.98 share of its own stock.
Analysts said Proffitt shares fell this morning after investors thought the issuance of new shares would dilute the value of the stock.
Younkers fought off Carson’s $20 a share bid, which was valued at about $180 million, but the fight between the companies is not yet over. Carson is still awaiting a Delaware court’s ruling on its challenge of Younkers’ takeover defenses.
Younkers shareholders elected three Carson-backed nominees to Younkers’ board of directors earlier this year, and approved a nonbinding resolution from Carson calling for Younkers to be sold to the highest bidder.
Carson officials were not immediately available for comment today’s announcement, but Younkers Chairman Thomas Gould said all three Carson-backed members of the Younkers board voted for the purchase.
Analyst John Curti of Securities Corp. of Iowa. said that Carson stands to benefit from the deal because it owns 11.7 percent of Younkers stock.
Gould would become vice chairman of Proffitt’s under the agreement. Younkers headquarters would also remain in Des Moines, but some layoffs were possible.
Proffitt’s had sales of 698 million and net income of $18.8 million last year. Younkers had sales of $605 million and net income of $14.6 million.