The Linked Paths of Macy and Federated

Here are some important events leading up to the merger of R.H. Macy & Co. and Federated Department Stores Inc. The histories of Macy and Federated have been intertwined in recent years as the companies have coped with financial strife and takeover bids.

* Jan. 16, 1986: Macy board, under Chairman Edward Finkelstein, approves a $3.58-billion debt-financed takeover from top management, converting Macy into a privately held company.

* Oct. 26, 1987: Macy loses only $13.8 million in its first year as a private company, compared to a projected $62.5-million loss, raising optimism that it will succeed as a privately held company.

* Feb. 29, 1988: Macy offers $6.1 billion for Federated Department Stores, prompting a bidding war with Campeau Corp. of Canada, which some time earlier had launched a takeover bid for Federated. Federated controls Bullock’s and I. Magnin, with Allen I. Questrom (current Federated chief) serving as chairman of Bullock’s.

* April 1, 1988: Campeau wins Federated in a $6.6-billion compromise that allows Macy to buy Federated’s Bullock’s and I. Magnin divisions for $1.1 billion, substantially increasing Macy’s debt load.

* July 31, 1988: With sales sluggish, Macy loses $188 million for the fiscal year. Concerns grow about the company’s ability to handle its debt, which now exceeds $5 billion.

* July 31, 1989: Macy posts a $53.6-million loss for the 1989 fiscal year.

* Oct. 19, 1990: Macy’s losses triple to $215.3 million for the 1990 fiscal year.

* Nov. 1, 1991: Macy posts loss of $150.2 million for the 1991 fiscal year.

* Dec. 17, 1991: Macy posts first-quarter loss of $155.4 million, triple the loss recorded the previous first quarter, because of weak sales.

* Jan. 27, 1992: Macy files for Chapter 11 bankruptcy protection. Documents reveal that the company has nearly depleted its cash.

* Aug. 1, 1993: Myron E. Ullman III becomes chairman and chief executive of Macy.

* Jan. 2, 1994: Federated reveals that it has bought half of the Macy debt held by Prudential Insurance Co., giving Federated a seat at the bargaining table in Macy’s Chapter 11 reorganization. Federated also publicly raises the idea of a merger with Macy.

* Jan. 3, 1994: Macy and Federated open discussions on Federated’s interest in a merger. Macy indicates that it would prefer to remain independent.

* July 1, 1994: Representatives of Federated present a detailed merger plan to Macy’s board. Many of Macy’s major creditors now back the Federated proposal.

* July 8, 1994: Pressured by creditors, Macy’s board decides to open merger negotiations with Federated.

* July 14, 1994: Macy board agrees in principal to a merger with Federated.