NEW YORK -- Like an eager swain wooing the family of a prospective bride, Federated Department Stores is about to make its case for a merger to Macy's creditors.
Federated has invited all the key players in the R.H. Macy & Co. Chapter 11 case for a "getting-to-know-you" meeting next Wednesday at the offices here of Jones, Day, Reavis & Pogue, Federated's lawyers.
After having been rebuffed by Macy management, Federated will now seek acceptance by Macy creditors. It will present its financial picture and list its reasons why a union of the two retail giants would benefit both of them, WWD learned Tuesday.
A Federated spokesman declined comment on the meeting. Federated, which will not present a formal reorganization plan, has met one-on-one with the main creditor groups for a month, but this would be the first time all the top figures -- with the exception of Macy's -- would be gathered under one roof. "If somebody is proposing a marriage, they have to tell the other party what's in the dowry," said Robert Miller, counsel for Macy's bondholders' committee.
One source close to the case said he expects Federated to criticize the length of Macy's reorganization, which is entering its third year.
"They've got to bash Macy's a little," said the source. "They'll probably say, 'We've looked at Macy's business plan, and we don't think they can get out for another couple of years, but stick with us and we can do it in a year."'
Federated became a player in Macy's reorganization on Jan. 2, when it acquired half of Prudential Insurance Co.'s $1 billion claim secured by mortgages on 70 of Macy's 110 department stores.
Since the Federated foray, analysts have praised the potential synergy of the combination, but Macy's has remained cool to the idea.
A Macy's spokesman downplayed the upcoming meeting.
"Federated has been in contact with these groups in the past, and we assumed they would have contact in the future as well," the spokesman said. "We continue to believe that rebuilding a strong, independent Macy's and developing our own plan of reorganization is the best way to create value for our creditors. And that's exactly what we're doing."
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