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TUGAS MATA KULIAH “CORPORATE STRATEGY”

CARTER HAWLEY HALE VERSUS MARSHALL FIELD &


COMPANY

Dosen :

Dr. Bambang Riyanto LS, MBA

Disusun Oleh:

Bob Lahiradja
Emeninta Sinuraya
Hendra Ferdinan
Soni Widodo

PROGRAM MAGISTER MANAJEMEN


UNIVERSITAS GADJAH MADA
2010

Q1:

What defensive actions did Marshall Field take in response to Carter


Hawley Hale’s interest ?

A1 :

There were several defensive actions that Marshall Field take in response to Carter
Hawley Hale’s interest :

• Marshall Field said that the price proposed by CHH was inadequate.

• Field directors said the the merger would not be in the best interest of Field
stockholders, employees, and customers. The merger would give a bad
impact for the company.

• Field filed an antitrust suit. Since CHH was the nation’s eighth-largest
department store group and Field was the largest of the department store
independents, the merger of both companies would lessen competition in the
market.

Q2 :

Why did Carter Hawley Hale want to acquire Marshall Field ?

A2 :

Carter Hawley Hale wanted to acquire Marshall Field in some reasons, which were :

• CHH had a debt-to-equity ratio of 42%, or 113% with lease capitalization, and
was planning to finance the merger on the strength of Field’s balance sheet.

• Field owned valueable real estate, possessed large cash reserves, and had a
conservative debt-to-equity ratio of 28% even with lease capitalization.

• CHH had been looking to break into the Chicago market and believed it could
bring operating improvements to Field.

Q3 :

Over the years, which defense did Marshall Field employ several times ?

A3 :

Marshall Field employed defense actions below :

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• Field’s board agreed to expand into Galleria in Houston and to acquire five
Liberty House stores in the Northwest. The two transactions would total $ 34
million. The Liberty House acquisition was the context of takeover battle.

• Through the expansion program, Field increased its debt, making it less
attractive to CHH.

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Q4 :

Which characteristics attracted Marshall Field’s suitors to bid for the


company ?

A4 :

There were several characteristics which attracted Marshall Field’s suitors to bid for
the company :

• Field was the largest of the department store independents.

• Field had the ambitious vision of becoming a national retailer.

• Field owned valueable real estate, possessed large cash reserves, and had a
conservative debt-to-equity ratio of 28% even with lease capitalization.

• In 1981, its share price had fallen to less than $ 20 per share from $23 in
1976, where the book value was $27.

Q5 :

Who was Marshall Field’s white knight ?

A4 :

The Marshall Field’s white knight was Batus Incorporated, the American subsidiary
of B.A.T. Industries of London. Batus owned the nation’s third largest tobacco
company,as well as Gimbel’s and Saks Fifth Avenue.