NEW YORK — It’s not a done deal yet and there’s time for higher bids, but Elder-Beerman Stores Corp. said it intends to accept the $7 a share merger offer from The Bon-Ton Stores Inc., which on Thursday made a definitive takeover proposal.
The merger would combine two regional department store chains with similar vendor structures and target customers and no stores in the same malls. The deal is contingent on at least two-thirds of Elder-Beerman’s outstanding common shares, on a fully diluted basis, being tendered, Bon-Ton’s securing financing, government approval — and no richer offers coming in.
Elder-Beerman’s board of directors met Thursday and notified Wright Holdings Inc. of its intention to enter a merger agreement with Bon-Ton. Last June, Elder-Beerman entered a definitive merger agreement with Wright at a price of $6 a share. Under that agreement, Elder-Beerman is required to engage in good-faith negotiations for a period of three business days before accepting any other proposal, providing Wright an opportunity to boost its offer. Wright Holdings includes members of Elder-Beerman management.
Elder-Beerman, based in Dayton, Ohio, operates 68 stores in Ohio, West Virginia, Indiana, Michigan, Illinois, Kentucky, Wisconsin and Pennsylvania. Its volume was $670.6 million last year.
Bon-Ton, with $713 million in volume last year, has 72 units operating in New York, Pennsylvania, Maryland, Massachusetts, New Hampshire, Vermont and West Virginia.
Bon-Ton’s offer would be valued at around $200 million.
With Thursday’s development, EB Acquisition Ltd., an Ohio-based real estate investor and developer, seems to have dropped out of the bidding. It made a $5.50 offer for Elder-Beerman earlier this summer, although EB has said it would consider stepping up with a renewed bid.