WOOLWORTH HOLDERS TO VOTE ON GREENWAY PROXY PLANS

NEW YORK — When Woolworth Corp. conducts its annual meeting on Thursday, stockholders will be asked to consider a couple of ideas proposed by Greenway Partners, holders of a 6 percent stake in the company:
They will be asked to vote against the company’s name change to Venator Group.
In addition, they will be asked to support a proxy proposal that Woolworth sell its general merchandise business in Germany and use the proceeds for a stock buyback.
It is a tactic that has become a ritual for Greenway, which is asking shareholders for the third straight year to take action to unlock what it believes is hidden value in Woolworth’s stock price. Woolworth stock closed at 20 3/8, up 5/8 on the New York Stock Exchange Tuesday, and has ranged from 18 1/4 to 28 3/4 in the past 52 weeks.
The New York investment firm, which holds more than eight million of Woolworth’s 135 million common shares, is also urging the retailer’s management to use cash in its $750 million acquisition of The Sports Authority, rather than issuing stock.
“Given today’s low stock price relative to Woolworth’s true value, we view the transaction as being too dilutive to shareholders over the long run,” said Alfred D. Kingsley, Greenway’s senior managing director, and his partner, Gary K. Duberstein, in a letter sent last week to Woolworth shareholders. “Woolworth has relatively little long-term debt on its books, should easily be able to borrow the full cost of the acquisition and can then pay down the debt as it sells its nonathletic related assets.”
Indeed, Greenway is again calling for Woolworth to focus on its core athletic chains such as Foot Locker and Champs Sports and its Northern Group of casual apparel stores and to dispose of unrelated businesses such as Afterthoughts and The San Francisco Music Box Company, as well as Woolworth Germany.
In 1996, Greenway was defeated in its proxy proposal that Woolworth spin off its group of athletic chains. Last year, Greenway’s bid to get Woolworth to reinstate its dividend to shareholders also fell short.

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