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Dillard chatter quickly tamed
Experts say the chances of a hostile takeover are small.
By MARK ALBRIGHT
Published June 29, 2007
Shares in Dillard's Inc. jumped 8 percent Thursday after an activist hedge fund complained the department store's controlling family is dodging phone calls to discuss ideas for increasing shareholder value. That's often Wall Street-speak for the prelude to a hostile bid, but analysts expect the Dillard family's tight grip on ownership and its role in top management will head off further unpleasantries. "There have been lots of investors unhappy with Dillard's performance, " said Howard Davidowitz, an investment banker who specializes in retailers. "But the Dillard family control is impregnable, so I don't see this going too far." Shares in Dillard's, which maintains a regional office in St. Petersburg, closed Thursday at $36.69, up $2.76. Barrington Capital Group released a letter Thursday written to Bill Dillard II, chairman and chief executive officer, asking for a meeting. Jim Mitarotonda, manager of the New York fund that holds 3.2 percent of Dillard's shares, said he wrote the letter, then made it public because nobody from Dillard's returned his calls. The company did not respond publicly to the missive. Mitarotonda was vague about his ideas for Dillard's, but listed real estate as a big one. Many hedge funds are eager to tap into the value of mall real estate owned by big retailers that is not fully reflected in their stock price. Dillard's owns the ground under virtually all its 328 mall department stores. Dillard's sales productivity has been on a downward trend. In the most recent quarter, same-store sales declined 5 percent and profits were down 30 percent. The untapped value of the real estate is not as compelling as Barrington assumes, said Oppenheimer & Co. in a research note, adding that the family will sell eventually, but not until business gets worse. The Dillard family controls 99 percent of the shares used to elect eight of the 12 board members. Family members hold the top four executive posts. Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.
[Last modified June 28, 2007, 22:54:30]
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by Mike
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06/29/07 01:05 PM
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The stores are too crowded with merchandise-especially the men's department. My wife doesn't like going unless she know's there is a sale, because the stores seem closed in and even run down. And, she says you can never find a person to wait on you.
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