Saks ends rights plan to prevent takeover
New York City Saks said late Monday that it was ending changes it made to its shareholders rights plan last year when it sought to prevent a potential hostile takeover by Mexican billionaire investor Carlos Slim Helu.
In a statement, Saks CEO Steve Sadove said those steps — referred to in the finance community as a “poison pill” — were no longer necessary because of a change made last month to its revolving credit agreement, which raised a “change-of-control” threshold to 40% from 20%.
In November 2008, Saks introduced the changes to protect itself after Slim reported a stake in the company of 17.8%, making him the biggest investor.
At the time, the company said it would distribute one preferred share purchase right for each outstanding share of Saks common stock.
Saks had also said last year that if any individual or investor reached or surpassed a 20% stake, those rights would let shareholders buy shares at a 50% discount and give them ammunition to block an unwanted overture.
Saks said at the time that the action was intended to “impose a significant penalty upon any person or group” acquiring 20%.
Santa surfing the Web this year
Full parking lots and crowded stores are testament to the fact that lots of people are Christmas shopping. Unfortunately, it is a different story when it comes to actual sales, as illustrated by November results and month-to-date projections for December, which shows consumers are reluctant to spend even though plenty of them are shopping.
It is a different story online though, where strong purchase activity is driving sales to record levels. That’s good new for Target, because the company enjoys a favorable national reputation, which means it can attract customers to Target.com beyond those who are physically able to shop at its nearly 1,800 locations. That explains why the retailer’s Web site is ranked 31st in comScore’s most recent listing of the top 50 U.S. Web properties, with 27.1 million unique visitors, compared with Walmart.com, with 31.8 million unique visitors. The Target and Walmart rankings are based on traffic in October, and, with November results due out later this week, both retailers are sure to have moved higher in the rankings due to their aggressive promotions and marketing efforts that have made online sales activity a real bright spot this season. According to comScore, online spending for the period beginning Nov. 1 through Dec. 11 increased 3% to nearly $20 billion, and roughly $4 billion of that amount occurred during the five days since Dec. 6, when comScore noted that online sales for the holiday period total nearly $16 billion.
Got organic milk?
You can never find a copy editor when you need one. Had someone detected a seemingly minor discrepancy between the photo of a product that appeared in a print ad and the item sold in stores, the retailer could have avoided some recent negative publicity. The issue involved Silk-brand soy milk and Target’s use of a product photo that included the word organic. Unfortunately, the photo was old, and the soy milk being sold in stores wasn’t organic. A group called the Cornucopia Institute noticed the discrepancy and brought the attention to the U.S. Department of Agriculture and the Associated Press, which obliged the watchdog group with coverage of the matter.
Target chose not to respond, but such instances, isolated as they may be, tend to reinforce existing negative perceptions within the more conspiratorial segments of the organic community that larger retailers can not be trusted, and, given the opportunity, will cut corners and weaken organic standards.