Federated offers to repurchase notes
July 30, 2004-- Home Textiles Today,
CINCINNATI — Federated Department Stores, the Cincinnati-based parent of Bloomingdale's and Macy's, said it has launched an offer to repurchase all of its $350 million in 8.5 percent senior notes maturing in 2010.
Federated said once the deal is put to bed, it expects "to achieve reduced interest expense and higher earnings per share in 2004," excluding any one-time costs tied to the repurchase. The company said it will pay for the buyback from existing cash balances.
Credit Suisse First Boston and Bank of America Securities are managing the offer.
At the same time, the department store chain said its directors have authorized an additional common stock buyback of $750 million. The latest move brings to a total of $1.29 billion the amount authorized for share repurchase.
The retailer said it plans to repurchase about $700 to $900 million worth of its common stock during 2004. As of July 16, the company said it had repurchased about 5.7 million shares this year, paying about $280 million in cash.
"Federated has significant excess cash, and we intend to use it to deliver value to our shareholders," said Federated CEO Terry Lundgren, emphasizing, "It is important to recognize that these actions do not limit Federated's ability to pursue strategic investments."