Campeau Wins Federated Stores Battle; Macy’s Will Buy Bullock’s, I. Magnin

Campeau Corp. won its 2-month-old battle for Federated Department Stores Inc. today, but its rival for the nation’s fifth-largest retailer will buy two of Federated’s divisions, the stores announced today.

R.H. Macy & Co. Inc. came away from its fight for Federated with the Bullock’s, Bullocks-Wilshire and I. Magnin chains.

A source described Macy as “very happy” with the outcome.

Toronto-based Campeau, a leading North American retailer and real estate company, has agreed to pay $6.64 billion, or $73.50 a share in an all-cash tender, an amount 50 cents lower than the developer offered Wednesday for 90% of Federated’s shares.

Macy, a privately held concern which Thursday increased its bid to $75.14 per share, or $6.8 billion, worked out an agreement with Campeau on Thursday night in which Macy would be sold the two Federated divisions for $1.1 billion, sources familiar with the negotiations said.

‘Lockup Agreement’

The deal ran along the lines of a “lockup” agreement between Macy and Federated last month, which gave Macy the right to buy Bullock’s and I. Magnin if the two companies’ merger agreement fell through.

Federated stock closed at $72.87 1/2 a share on the New York Stock Exchange on Thursday. The stock market was closed for Good Friday.

Federated had reached a merger agreement with Macy on March 2 but reopened the bidding after Campeau, a Canadian real estate developer, raised its offer last week.

The fight for Federated began Jan. 25, when Campeau offered $4.2 billion to buy the retailer, which rejected the offer as inadequate.

Campeau raised its bid, but Federated spurned the Canadian company’s advances until the end of February, when the retailer agreed to negotiate with Campeau.

Battles Over ‘Poison Pill’

But as the Federated board was to meet to review that proposal, Macy presented its own bid, and on March 2, Federated and Macy announced their merger agreement.

Court battles over Federated’s “poison pill” takeover defense ensued, and both suitors continued to raise their offers until the Federated board called for “final bids” to be presented Wednesday.

The pill would make a takeover attempt more expensive by allowing Federated’s shareholders to buy more company stock at a discount, but the company’s board can drop the provision.

Federated’s divisions also include Bloomingdale’s, Burdine’s, Filene’s, Foley’s, Lazarus and Rich’s department stores.

Macy owns nearly 100 department and specialty stores.

Campeau, which started in real estate development in Canada, moved into the U.S. retail market at the end of 1986 by acquiring Allied Stores Corp.