NEW YORK, Feb. 28 (UPI) -- Federated Department Stores and The May Department Stores Co. announced Monday they have entered into a $17 billion merger agreement.
Each share of May will be converted into the right to receive $17.75 per share of cash and 0.31 shares of Federated stock. Based on the 10-day trading average of Federated stock as of Friday, that equates to a value per share of $35.50, or $11 billion in total equity. In addition, Federated will assume May debt that was approximately $6 billion at year-end, for a total consideration of approximately $17 billion.
The deal, approved by the boards of directors of both companies late Sunday, will establish Federated as a $30 billion national retailer with more than 950 department stores and some 700 bridal and formalwear stores in 49 states, Guam, Puerto Rico and the District of Columbia.
Completion of the deal is contingent on regulatory review and approval by the shareholders of both companies, a process that is expected to take several months. The transaction is expected to close in the third quarter of 2005.
Federated stores include Macy's, Bloomingdale's, Bon-Macy's, Burdines-Macy's, Goldsmith's-Macy's, Lazarus-Macy's and Rich's-Macy's; May stores include Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's, Lord & Taylor, L.S. Ayres, Marshall Field's, Meier & Frank, Robinsons-May, Strawbridge's, and The Jones Store, as well as David's Bridal stores, After Hours Formalwear stores, and Priscilla of Boston stores.
