ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, April 26, 1996 TAG: 9604260039
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: MINNEAPOLIS
SOURCE: Bloomberg Business News
Dayton Hudson Corp. said Thursday that it rejected a buyout proposal valuing it at $6.82 billion from J.C. Penney Co., adding that it prefers to remain independent.
Dayton Hudson said the two retailers have not talked since February, when its board unanimously and quickly rejected the unsolicited stock-and-cash proposal that valued it at $90 to $95 per share of common stock.
The offer comes amid frenzied consolidation in the retail industry as merchants - particularly department store chains - turn to acquisitions as a way to grow in the saturated U.S. market.
``Retailers figure, `If I don't make acquisitions now, somebody else is going to do it and I'm going to be left behind,''' said Kurt Barnard, president of Barnard's Retail Marketing Report.
A combined Dayton Hudson and Penney, the nation's fourth-and fifth-largest retailers respectively, would have about $44 billion in sales and 2,300 stores - ranking it behind only Wal-Mart in sales.
For at least the past year, there has been speculation that Minneapolis-based Dayton Hudson would shed money-losing Mervyn's, its mid-price department store chain, as efforts to spruce up the 297 stores and revive sales have failed.
There also has been talk that Dayton Hudson, which gets almost two-thirds of its sales and profits from its vibrant Target discount store chain, would sell its department stores, which include Marshall Field and Dayton's stores.
Still, most retail-watchers say Dayton Hudson isn't likely to sell the whole company any time soon, largely because of growth potential at its 688-store Target chain.
Penney, based in Plano, Texas, and operating 1,238 stores, has had five straight quarters of declining earnings. It has struggled with sluggish apparel sales and heightened competition from a revived Sears, Roebuck & Co.
LENGTH: Short : 43 linesby CNB