TISCH SEEN ON FEDERATED BOARD
Byline: DAVID MOIN and RICH WILNER
NEW YORK — Laurence A. Tisch, CBS chairman and renegade member of the R.H. Macy & Co. board, who for months pushed for the merger with Federated Department Stores, is expected to join Federated’s board.
That will put him back in the ring with Myron E. Ullman, Macy’s chairman, who, under last week’s merger agreement, will also join the board at Federated.
During the seven-month battle to merge with Macy’s, Allen I. Questrom, Federated’s chairman and chief executive officer, was in frequent communication with Tisch, according to sources. Tisch, a Macy bondholder, reportedly expressed more confidence in Federated’s management team than Macy’s, and was often at odds with Ullman, who fought to preserve Macy’s independence.
Sources said two other Macy directors, Gertrude G. Michelson and Paul W. Van Orden, are also expected to take seats on Federated’s board.
Federated and Macy’s had no comment Friday.
On Thursday, when the Federated/Macy merger agreement was announced, the companies said that Ullman, Macy chairman and chief executive officer, would join the Federated board and become deputy chairman of the merged company.
Federated said that three other Macy directors would also take seats on its board, but did not identify them.
Federated also formed an office of the chairman that includes Questrom and James Zimmerman, Federated president and chief operating officer, and Ullman.
Michelson was a Macy’s senior vice president of human resources and, later, supervised external affairs. She serves on several boards including General Electric Corp., Chubb Corp. and Goodyear Tire and Rubber Co.
Van Orden retired as executive vice president of General Electric Corp. in January 1991. He is on the faculty of the Columbia University Graduate School of Business. G.E. Capital, a unit of G.E., runs Macy’s credit-card business. Gary Wendt, G.E. Capital’s chairman, also has a seat on Macy’s board, but sources did not list him among those joining Federated’s board.
Federated has reportedly agreed to honor Macy’s contract with G.E., which extends through 1996.
Meanwhile, Macy’s annual Thanksgiving Day parade and July 4 fireworks display, two of the company’s most elaborate and widely recognized special events, will continue after the merger, a Federated spokeswoman said Sunday.
A Macy’s spokesman noted that when Ullman addressed Macy’s employees via the company’s internal television network on Thursday following the merger announcement, he said Federated sees great value in the Macy’s name, employees and special events, which include the parade and fireworks.
In another development, Standard & Poor’s Corp., which six months ago put $300 million of Federated Department Stores Inc. debt on “credit watch” with negative implications, reported Friday that it expects to resolve the ratings issue by Jan. 31.
The Federated-Macy merger will create a $13.5 billion department store company, the nation’s largest. The companies hope to finalize the deal by Jan. 31.
S&P said it will keep that issue of Federated’s debt on credit watch until it can “fully assess the extent of any added business and financial risk” resulting from the merger.
One of the key financial concerns is that Federated’s cash flow may be weakened, since Macy is still losing money. The $300 million in convertible secured notes due in 2004 is the only publicly held issue.