General Cinema Calls Off Deal on Neiman Marcus

Less than a week after announcing it would buy the remaining stock in Neiman Marcus Group, General Cinema Corp. announced today that the deal is off.

General Cinema, which already owns a little more than half of the 33.2 million shares of outstanding common stock in Neiman Marcus, said it will not begin its $14.40 per share offer for the remainder.

General Cinema said it took the action because a special committee of the Neiman Marcus board of directors had decided to withdraw its recommendation of the tender offer.

General Cinema announced the deal last Tuesday, saying it had a large available pool of cash for buying the stock.

Analysts said that although the retail industry is sluggish, Neiman Marcus represented a good long-term investment for General Cinema.

Aside from its stake in Neiman Marcus common stock, General Cinema also holds an issue of convertible preferred stock in the specialty retailer that, if converted, would increase General Cinema’s total interest to about 60%.