NEW YORK — Shares of The Elder-Beerman Stores Corp. shot up 16.87 percent in trading Friday following the company’s announcement that it had signed an exclusive letter of intent agreement for a possible sale of the department store company.

The retailer did not name the suitor, but said that it had recently received expressions of interest from several parties. It said that the exclusivity arrangement is for a limited time to further explore a possible purchase. Elder-Beerman also said it retained RBC Capital Markets as its adviser. The retailer further cautioned there “can be no assurance that these discussions will result in any transaction.”

That caution didn’t stop shareholders from voting yes with their dollars, with 316,400 shares changing hands compared with a daily average of just 15,227. The stock, which trades on the Nasdaq, reached a new 52-week high in intraday trading at $5.48, before settling down to close at $4.85, a 70 cent gain.

Back in 2000, the Midwestern chain was a frequent subject of takeover speculation and there also were expectations that it might be taken private pervasive in the marketplace. According to financial sources, those expressing interest in acquiring the retailer back then were retail chains, not investment firms.

The firm, instead, elected to restructure operations, which resulted in the elimination of 130 jobs in the corporate office. The restructuring plans included focusing on opening and moderate price points and cosmetics, as well as operating in smaller stores in less-competitive markets.

Elder-Beerman’s struggles back then were also the topic of shareholders’ discontent. Dissident shareholders wanted the company to be sold or its management overhauled in 1999 and 2000. Scott Davido, who joined the retailer in 1997 as general counsel and was named chief financial officer in 1999, was the sole survivor of a management troika that had included Frederick Mershad as chairman and chief executive officer and John Muskovich as president and chief operating officer. Muskovich left Elder-Beerman in July 2000 and Mershad left in January 2002. Davido has since left the company as well, and was succeeded by Edward Tomechko in the cfo spot in June 2002. Elder-Beerman is currently led by Byron “Bud” Bergren, who joined the firm as president and ceo in February 2002.Headquartered in Dayton, Ohio, the chain operates a total of 68 stores in eight Northeastern and Midwestern states. It plans to enter its ninth marketplace in November 2003 through the opening of its Muscatine, Iowa store. Saddled with a change in accounting principle and other one-time charges, Elder-Beerman lost $14.2 million, or $1.33 a diluted share, in fiscal 2002 as sales dipped slightly to $670.6 million.

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