Federated Says It Will Pick Suitor Wednesday

Directors of Federated Department Stores will move Wednesday to end the bidding war for the retailer by acting on the final competing purchase offers of R. H. Macy & Co. and Campeau Corp., Federated said Monday.

Macy and Campeau have each offered more than $6 billion to buy Federated, the nation’s fifth-largest retailer. Macy’s bid has the approval of Federated management.

Federated and Macy previously signed a merger agreement under which Macy would take over Federated in a newly formed, joint company.

Federated’s divisions include Bloomingdale’s, Abraham & Straus, Bullock’s, Burdine’s, Filene’s, Foley’s, Lazarus and Rich’s department stores; Ralphs supermarkets; Gold Circle discount stores, and Main Street and Children’s Place specialty stores.

A committee of Federated’s outside directors met Monday to determine bidding procedures and would inform Macy and Campeau of those guidelines, Federated said in a statement.

The Wednesday meeting was to be held at an undisclosed location in New York. Federated has said Edward Finkelstein and Robert Campeau, the chairmen respectively of Macy and Campeau, would be allowed to address the directors.

In a letter to both suitors, Federated said: “It is anticipated that the board will consider and act on the parties’ final bids at a board meeting on Wednesday, March 30. Federated’s advisers will continue to be available to you to discuss all matters.”

Federated said last week that its board would meet this week to consider Campeau’s $6.53-billion offer and a $6.3-billion bid from Macy.

Robert Campeau, whose Toronto-based company has been trying since Jan. 25 to buy Federated, will address Federated’s board if invited, a spokeswoman said.

Macy, based in New York, had no comment, according to spokesman James Fingeroth.

Federated disclosed last week that it was negotiating with Macy about an improved Macy offer, but said there was no guarantee negotiations would be successful.

Campeau last week raised its two-step, all-cash offer to about $73 a share from $68, or $6.18 billion. Campeau offered to pay $82 each for 70.5 million Federated shares and $37 for the remainder of Federated’s 89.5 million outstanding shares in a subsequent merger. Campeau also extended its deadline until midnight EDT April 4, when Macy’s offer is to expire.

Campeau, a development company that bought Allied Stores Corp. in December, 1986, also proposed an alternate friendly merger under which it would pay $73 a share for 70.5 million shares in a tender offer and $73 for the remaining shares after the merger.

Macy has offered $77.35 a share in cash for 70.43 million Federated shares, for a total of $5.4 billion. Macy would exchange shares in the merged company and issue convertible debt securities for the remainder of Federated’s shares.

Federated has also delayed putting into effect, until at least Wednesday, a “poison pill” amendment to its shareholder rights plan. That would allow shareholders to buy new shares at a steep discount and make an unwanted takeover more expensive.