HARCOURT SELLS NMG SHARES
Byline: Dan Burrows
NEW YORK — The Neiman Marcus Group reported Monday that a group including Harcourt General Inc. has liquidated its entire 14.2 percent stake in NMG for about $128 million.
In a filing with the Securities and Exchange Commission, NMG reported that Harcourt, now a unit of Reed Elsevier, sold 3.8 million Class A shares in a privately negotiated transaction for $32.37 a share. Although the identity of the buyer or buyers isn’t known, the SEC requires that any party holding a stake of 5 percent or more in a publicly held firm report those holdings to the SEC.
Additionally, 154,204 Class A shares were sold “in a series of open market transactions conducted through customary brokerage arrangements” at about $32.95 a share, generating proceeds of just more than $5 million.
The deal will not affect Neiman’s chairman Richard Smith nor vice chairman Robert Smith. According to SEC filings, as of Nov. 23, 2001, the Smiths held 100,450 Class A shares and more than 10.3 million Class B shares combined through a family group and private ownership. Accounting for all holdings, the Smiths own 20.8 percent of NMG’s total common stock. Those shares were not part of Harcourt’s holdings.
Harcourt has been selling off its Neiman’s stock since May 1999, when it first spun off its controlling interest in the company in a move designed to spur Wall Street interest in both stocks.
The sell-off gained momentum in the last two weeks when Harcourt made its final moves to divest its Neiman’s position. On March 15, the company reported it had cut its Neiman’s stake to 15.3 percent from 18.1 percent. Ten days later, on March 25, Harcourt further reduced its holdings to the 14.2 percent it just sold. Wall Street agreed with the wisdom of the stock liquidation.
“Reed Elsevier bought Harcourt for its book business, not for Neiman Marcus,” said Eric Beder, an analyst with Ladenburg, Thalmann & Co. Inc. “It wasn’t a core business, and anything that’s not a core business, they’re not interested in. So, if you can find a buyer and the price is right, why not sell?”
Neiman’s shares closed up 55 cents, or 1.6 percent, at $35 on Monday in New York Stock Exchange trading.