Carter Hawley Rejects Takeover, May Divide Firm

Carter Hawley Hale Stores Inc. today rejected a sweetened $1.96-billion takeover offer by The Limited Inc. and Edward J. DeBartolo Corp. and instead proposed splitting Carter Hawley into two publicly held companies.

In addition, General Cinema Corp., Carter Hawley’s biggest stockholder, with a 38% stake, said it will vote in favor of the restructuring plan.

General Cinema also said it entered into a revised “standstill” agreement with Los Angeles-based Carter Hawley under which General Cinema could raise its stake in the company up to a controlling 50.1%.

The actions were major blows to the new takeover attempt by The Limited and DeBartolo, who had earlier today raised its tender offer for Carter Hawley to $60 a share from $55.

Under the plan, Carter Hawley would spin off Neiman-Marcus, Bergdorf Goodman and Contempo Casuals to its stockholders, retaining the Broadway, Emporium Capwell, Thalhimers and Weinstock’s chains.