The Limited Inc., which had repeatedly vowed to continue its challenge of Carter Hawley Hale Stores’ successful defense against the Ohio company’s takeover attempt, has quietly dropped all litigation against and sold all of its stock holdings in the Los Angeles-based retailer.
In a related development, the Securities and Exchange Commission, which had also posed a legal challenge to Carter Hawley’s complex defense, said it plans to dismiss its suit against the company. The agency’s move was expected, since it recently received formal notification that it had lost an appeal of a lower court ruling in favor of Carter Hawley.
End of Bitter Battle
The two developments mark the conclusion of a bitter, controversial corporate takeover battle. It began April 3, 1984, when the Limited launched a surprise and unwelcome $1.1-billion bid to buy Carter Hawley, parent of the Broadway, Neiman-Marcus, Bergdorf Goodman and other chains.
As part of its defense, Carter Hawley soon purchased 51%, or 17.9 million shares, of its own stock for $470 million. It also sold 1 million shares of a new issue of preferred stock for $300 million to Boston-based General Cinema, which received a 37% voting stake in the firm and a six-month option to purchase Carter Hawley’s Waldenbooks book store subsidiary.
When General Cinema did not pick up the option, Carter Hawley sold Waldenbooks to K mart.
In mid-April, the Limited unsuccessfully attempted to secure a federal court order to prevent Carter Hawley’s massive stock repurchases. In May, the SEC alleged that Carter Hawley’s massive stock repurchase over a six-day period constituted an illegal tender offer. However, U.S. District Judge A. Wallace Tashima in Los Angeles ruled against the agency.
The court clerk for Tashima said Tuesday that the judge signed papers filed by the Limited to drop the litigation on Aug. 19.
A spokesman for Carter Hawley said: “We are pleased.”
In a related move, Al Dietzel, a spokesman for the Limited, confirmed reports that the Limited recently sold all of its remaining shares of Carter Hawley stock on the open market. He would not indicate when the stock was sold or for what price.
The Limited, which owned 718,000 shares of Carter Hawley when it launched its takeover attempt, had sold about 85% of that amount by last June.
Just days before the Limited formally launched its takeover bid in 1984, Carter Hawley stock was trading on the New York Stock Exchange at about $23 a share. The shares fell 25 cents a share Tuesday to $27.75.