Bloomingdale’s Minimum Price Put at $1 Billion
Debt-ridden Campeau Corp. will not accept less than $1 billion for its Bloomingdale’s department store chain and has set a Dec. 8 deadline for bids, a company spokesman said today.
Carol Sanger, spokesman at Campeau’s Cincinnati office, said if Campeau does not get the price it wants, it will take the trend-setting chain off the auction block.
Sanger said a $1-billion minimum price tag for Bloomingdale’s “is pretty close to being correct.”
Campeau also has set Dec. 8 as a deadline for potential buyers to notify the retail and real estate company of the seriousness of their interest in acquiring Bloomingdale’s, Sanger said. A short list will then be drawn up.
Bloomingdale’s has 17 stores located in New York, Pennsylvania, Massachusetts, Virginia, Maryland, Illinois, Florida and Texas.
Kurt Barnard, publisher of New York-based Barnard’s Retail Marketing Report, said Campeau’s conditions indicate “to me that apparently there are some very serious bidders but they have opted to bid considerably less than $1 billion.”
Barnard said Campeau may be “flying a kite” to get the bidders to come forward. He said it might also be a signal that Campeau is willing to negotiate a deal worth less than $1 billion.
Chairman Robert Campeau’s original valuation of Bloomingdale’s at $2 billion was “ludicrous,” Barnard said, adding Campeau is under pressure to sell and clearly needs cash.
Analysts said Bloomingdale’s could bring between $1 billion and $1.5 billion to Campeau, the lower price if it were all cash and at the higher end if it involved stock, cash and junk bonds.
Earlier this week, Marvin S. Traub, Bloomingdale’s chairman, and Jeffrey Sherman, the chain’s president, were in Japan seeking minority investors for a management buyout of Bloomingdale’s, but failed to line up participants.
Other potential bidders include Tokyu Department Store Co., a major Japanese department store operator, and Pennsylvania-based Crown American Corp., which operates Hess’s stores.
Sanger said a definitive deal is not expected until the first of next year.
Campeau put Bloomingdale’s, its retailing crown jewel, up for sale Sept. 8, identifying the chain “as the best opportunity to most effectively reduce the company’s leverage with a single transaction.”
Campeau, with an estimated $10 billion debt, negotiated a complex deal with lenders and investors to infuse $250 million in cash into its two U.S. retailing subsidiaries on Sept. 19.
