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Title: Going for Broke: How Robert Campeau Bankrupted America's Retail Giants by John Rothchild ISBN: 0-14-017316-1 Publisher: Penguin USA Pub. Date: 01 November, 1992 Format: Paperback Volumes: 1 List Price(USD): $11.00 |
Average Customer Rating: 3 (1 review)
Rating: 3
Summary: The "White shoe" upset
Comment: Robert Campeau in 1980 unsuccessfully sought control of the Canadian financial institution, the Royal Turust; however, success changed for Campeau as he used First Boston Junk Bonds, Canadian Bank money and Citigroup commerical loans too acquire 1.2 billion in funding for the Allied Stores takeover, in 1986; also, continuing in 1988 to purchase the Federated Department Store, headquarters for Bloomingdales and selling off divisions to Macy's as a truce to complete the deal.
How did a Canadian Real Estate tycoon manage to purchase two of the largest retail corporations in America?
Campeau's Leverage Buy Out (LBO) penetrated the "Good Ole boy" federation. Campeau monetary worth was about 200 million. First Campeau hires Paine Webber too devise a plan for the purchase of Allied; quietly Campeau starts buying up Allied shares; Wassertein of First Boston master minds the generation of 900 million in Junk Bond funding giving Campeau capability; Campeau LBO goal was too over throw a complaceny management, sell off assets to pay debt, increase net profits to 12 percent gaining commerical funding, and operate on the 88 percent profitable divisions. The Allied share price of 44 dollars raised to a 68 dollar offer. Allied white knight fought to block the LBO and failed and never talked too Marcio's again. Campeau was the new celebrity of Holliwood bringing massive media attention.
How did Campeau managed many more billions of dollars in loans?
Federated Department Stores started with doubt whether Campeau was financial capability of acquiring the company. Federated was capable of 10.5 billion in sales more than twice that of Allied; Federated stores were on choice real estate locations; the Macy feud drove up the offering share price from 50 to over 76 dollars, the analyst numbers and computer models supported the price and Campeau was determined not to lose. Campeau turned to Wassertein as a consultant bridging the channel to First Boston; Security Pacific wanted in on the funding but was not selected; the era of mergers represented millions of dollars in fees for funding institutions, large lawyer staffs, and expensive documents.
Campeau was distained by the bankers and the author shows no reservation in vocalizing his hatred of Campeau. Bankers want investments that return fees over long periods of time; they take risks too find investments; selection of these investments is the question and who is too blame when long term payoff is not achieved?
Bankers take risk, policy and fees engaged Campeau into constant clashes with the bankers; Campeau was a tough negotiator; and in the end both parties profited handsomely from the merger. The demise of the worker was a result of economic supply and demand. Demand for products produce jobs.
Campeau had manipulated the financial world to gain what he wanted. The economic downturn of the 80s crushed the hopes of holding on to Allied and Federated and rather than praising Campeau for his accomplishment, he is disgraced. Campeau's plan was keep the most profitable divisions of Allied, put his own people in senior management, centralize the computer and accounting systems, downsize the staff, and increase profitablity.
As a result of debt, Bloomingdales was auctioned off and he was forced to step down; and Campeau returned to real estate.
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