Besieged BAT to Sell Saks, Marshall Field : British Firm Trying to Deflect Hostile $21.7-Billion Takeover Bid

LONDON —  Britain’s BAT Industries PLC said today it plans to sell its prestigious Saks Fifth Avenue and Marshall Field department store chains in a defensive maneuver to fight Sir James Goldsmith’s hostile $21.7-billion takeover bid.

The giant tobacco, retailing and financial services conglomerate announced the proposed sell-off in a major restructuring to boost its stock price.

“The reshaped group has the potential to provide a rewarding investment for shareholders in the 1990s and beyond,” BAT Chairman Patrick Sheehy said.

Saks and Chicago-based Marshall Field are being put on the market at a time of upheaval in the department store business.

Canada’s Campeau Corp. recently decided to sell its Bloomingdale’s stores, another of the best-known U.S. department store chains, in a desperate attempt by the largest North American department store operator to raise cash.

While the department stores are considered valuable long-term real estate holdings, their current earnings have been hurt by intensive competition and slack demand.

Under its plan, BAT will concentrate on its core tobacco and financial services businesses and sell Saks, Marshall Field and its interests in the West German Horten department store chain. No date was given.

BAT’s proposal was a departure from the company’s stated commitment to diversification and more in line with Goldsmith’s plan to unload the non-tobacco interests.

But BAT was promising shareholders more equity and higher dividends while Goldsmith’s radical proposal was based on loan notes--described by analysts as high-risk junk bonds--that would be repaid by the rapid sale of parts of the BAT Group.