Bon Ton flirts with Elder-Beerman
August 18, 2003-- Home Textiles Today,
Two more regional department stores may merge in the future, as The Bon Ton recently expressed interest in merging with Elder-Beerman.
This is several months after Elder-Beerman entered into an agreement with Wright Holdings Inc. and its subsidiary providing for the acquisition of all outstanding shares at a price of $6 per share, a route it is still actively pursuing. The Bon Ton made an offer to Elder-Beerman of $7 per share, though "no firm offer has been submitted by The Bon Ton yet," said Gloria Siegler, a spokeswoman for Elder Beerman. "Until that happens, Elder-Beerman will move forward with the Wright Holdings offer."
She added that "The Bon Ton has always been an interesting strategic fit."
"The whole industry is still consolidating," said Walter Loeb, Loeb Associates. "They're looking at how to improve and rationalize business" like the May Co., which earlier this month announced the closing of 34 stores. The merger between The Bon Ton and Elder-Beerman is complementary, especially since they are located close together geographically. "It's not like one is on the East Coast and the other is on the West Coast."
Elder-Beerman will call a special shareholder meeting once its board sets a date, Siegler said. Once the board has decided which is the best deal for its shareholders, the shareholders will vote on the proposal.
Tim Grumbacher, chairman and ceo, The Bon Ton, had told Elder-Beerman that a merger would be in the best interests of both companies' shareholders, customers and employees, and that The Bon Ton is prepared to immediately commence its due diligence with the goal of completing the transaction by the end of September.
Elder-Beerman operates 68 stores in Ohio, West Virginia, Indiana, Michigan, Illinois, Kentucky, Wisconsin and Pennsylvania, which would seem to fit in with The Bon Ton, which has 72 department stores in Pennsylvania, New York, Maryland, New Jersey, Connecticut, Massachusetts, New Hampshire, Vermont, and West Virginia.
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