Thursday, December 30, 1999
Elder-Beerman faces more shareholder pressure
BY LISA BIANK FASIG
The Cincinnati Enquirer
One of several major shareholders of Elder-Beerman Stores Corp. has increased his stake in the company, weeks after the retailer added two new directors to its board to relieve investor pressure.
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MAJOR INVESTORS
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• James D. Bennett of Stamford, Conn., in November announced a 5.4 percent stake in Elder-Beerman and increased his stake to 6.5 percent this month.
• Snyder Capital Management LP and an affiliate in Sep tember announced a 19.6 percent stake and called to replace two directors with executives who have “more experience in guiding ongoing public enterprise.”
• PPM America Inc., with a 12.5 percent stake, in Septem ber also called to replace two directors.
• David Nierenberg, who owns more than 5 percent of Elder-Beerman's outstanding shares, in August called for the replacement of the retailer's top two executives.
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James D. Bennett of Stamford, Conn., has increased his stake in the Dayton, Ohio-based chain to 6.5 percent from 5.4 percent — a total investment of $6.8 million.
Mr. Bennett began investing in Elder-Beerman in August. In November, with a 5.4 percent stake, he filed government documents proposing the company buy back “a significant portion of its shares and/or take other actions with respect to the company, should he deem such actions appropriate.” He said he wanted to discuss the business with management and shareholders.
Mr. Bennett is vacationing and could not be reached Wednesday. But his latest government filing says there is no change in the purpose of his transaction, meaning he still hopes to influence management.
Since August, four inves tors have increased their stakes and begun pressuring the retailer to find ways to become profitable by replacing board members or executives.
Elder-Beerman responded in early December by appointing two new directors and expanding its board to 11 members. Dennis Bookshester, 60, is interim chief executive of Fruit of the Loom, and Charles Macaluso, 59, is a principal of East-Ridge Consulting Inc., a management advisory and in vestment firm.
But Elder-Beerman's stock has not recovered. Since late September, shares have fallen to $5 a share from $6.50.
Sources at Elder-Beerman could not be reached or did not return phone calls Wednesday. In November, Elder Chief Financial Officer Scott Davido said Mr. Bennett's investment group was “very supportive of management.”
Mr. Bennett now owns 971,200 shares of Elder-Beerman. As of Dec. 8, Elder-Beerman had almost 15 million common shares outstanding.
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