Federated Department Stores has reached a deal to acquire May Co. in a stock-and-cash deal valued at about $11 billion, combining two of the nation’s biggest department store chains, The Post has learned.
After heated negotiations that continued throughout a good part of the weekend, the boards of both companies approved the deal late yesterday afternoon, sources familiar with the matter said. A deal – expected to be announced as early as this morning – would put Macy’s, Bloomingdale’s and Lord & Taylor under the same leadership.
Representatives for May, which owns Lord & Taylor, Marshall Field’s and Filene’s, and Federated, parent company of Macy’s and Bloomie’s, could not be reached for comment.
Exact details of the terms and structure of the transaction were not immediately clear. However, sources said that Federated would be paying roughly $36 per share for May, split evenly between cash and stock.
The company will also assume $6 billion in May debt.
The companies have held merger talks off and on for the past several years. They were reignited in January after the surprise resignation of Eugene Kahn, May’s chairman and chief executive.
The last round of serious talks between the two companies broke off in 2002 after the sides bickered over who would lead the combined company. May saw its fourth quarter earnings fall 20 percent on discounting and store-closing costs. The costs to close some of its Lord & Taylor stores and change accounting for leases sliced profits by 14 cents per share.
Federated, meanwhile, reported a 4-percent drop in quarterly earnings, and issued a gloomy revenue forecast for the next quarter. Federated has long been on the acquisition hunt. Prior to talks with May, the chain was in discussions with Saks.