ANALYSTS: CARSON'S BID FOR YOUNKERS HAS HAD IT

Byline: Valerie Seckler

NEW YORK--Carson Pirie Scott's $19-per-share cash tender offer to buy Younkers appears to be dead, analysts said on Monday after Carson's made its final extension on the bid, this time to Friday.
"We are not planning to extend our $19 offer past June 30 because it does not appear to us that there would be any benefit to keeping the offer open after that date," Stanton J. Bluestone, Carson's president and chief executive officer, said in a statement.
Philip Abbenhaus, analyst at Stifel, Nicolaus, St. Louis, said, "It wouldn't surprise me if Carson's walked away from this deal on Friday. [Younkers] stock is saying no one expects this deal to get done."
Younkers stock fell 7/8 to close at 17 1/4 in NASDAQ trading Monday.
"It looks like the tender will die on Friday," said John Curti, analyst at Securities Corp. of Iowa, Cedar Rapids.
In Curti's view, Carson's best chance of acquiring Younkers is to wait and see if the chain's performance weakens in the next six to nine months and, if it does, to launch another tender offer. "They need Younkers to stumble," he said.
According to Carson's, about 3.5 million Younkers shares were tendered as of Monday, which, together with Carson's 1.05 million shares, gives it about 51 percent of Younkers's outstanding common stock.
Analysts noted that hostile bids rarely succeed when fewer than 80 percent of the takeover target's shares are tendered. Further, Younkers's poison pill, which makes untendered shares too costly for Carson's, can't be removed unless 80 percent of Younkers shares are tendered, Younkers chairman and ceo Thomas Gould said Monday.
Sources said Carson's could try to place three more directors on Younkers's 10-person board next year, gaining a majority and putting the company at auction as it unsuccessfully tried to do this month.
In the meantime, Bluestone said Carson's intends "to vigorously pursue our recently filed litigation and other available means to further our intention to acquire Younkers."
Carson's filed suit against Younkers earlier this month, charging that the three directors placed on Younkers's board by Carson's were denied access to Younkers's business books. The new directors are John Burden 3rd, Chaim Edelstein and Alan Cooper of Dickstein Partners.
Younkers asked Carson's on Friday to drop its suit against the chain. The suit also alleges "gross breaches" of fiduciary duty for the rejection of a proxy vote to put the firm at auction.
In addition, Younkers rejected Carson's $20-per-share bid for the company and charged Carson's with trying to discourage at least one other party from bidding for the retailer.
The $20 bid was turned down following its review by Goldman Sachs. Younkers declined to name the third party reportedly interested in bidding.
Gould said Goldman Sachs' appraisal of the bid was furnished to Younkers's directors at a board meeting last Thursday.
In a June 19 letter to Younkers's three new directors, Gould charged, "Bluestone called at least one potential bidder (that we know of) and attempted to discourage it from entering any bidding contest for Younkers."-- Fairchild News Service

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