NEW YORK — The action should heat up as bids for all or part of Saks Inc. are due today.
As reported, management at Saks Inc. still hasn't decided whether or not to sell the entire company. Officially, only the northern department store group, which includes Carson Pirie Scott, Bergner's and The Boston Store, and the Club Libby Lu specialty chain, is for sale.
Bids submitted today are expected to include offers for only the northern department store group as well as for all of Saks Inc., according to sources in the banking and financial market. Saks in its entirety includes the crown jewel Saks Fifth Avenue operation, and its Parisian business.
Sources said several leveraged buyout firms are expected to make a play for all or part of the company, but it couldn't be determined at press time which firm or firms are involved.
The initial deadline for the northern department store group was set for Aug. 15. However, it was extended after a two-day Saks Inc. board meeting on Aug. 8 and 9 to provide latecomers time to prepare offers for all of the company. Sources said the board is expected to review all bids — and see where the valuations end up — before deciding whether it makes sense to sell only the northern group or all of Saks Inc.
While SFA and Parisian are not officially for sale, the board would be pressured to sell if a strong enough offer emerged, as part of its fiduciary responsibility to shareholders.
Some sources said several board members privately are leaning toward unloading the entire company, but it was not clear whether the topic came up during the board meeting itself. The company could not be reached for comment.
There's also been concern as to whether the Saks Fifth Avenue turnaround efforts are proceeding as expected. In addition, Saks Inc. is under investigation by the government for certain chargeback and accounting procedures at SFA. Several employees already have been fired. According to sources, Saks' management doesn't believe the probe by the U.S. Attorney's office in Manhattan and the Securities and Exchange Commission would hinder a deal.
As previously reported, Bon-Ton Stores Inc. and Cerberus Capital Management are expected to present a joint bid for SFA and the northern department store group that could go as high as $30 a share, or a little more than $4 billion for the entire company. Cerberus already owns Rafaella Sportswear, Mervyns and Fila.
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