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JACK ECKERD HAS WAR CHEST OF OVER $1 BIL. TO FIGHT DART GROUP

Executive Summary

JACK ECKERD HAS WAR CHEST OF OVER $1 BIL. TO FIGHT DART GROUP in the event of a takeover attempt by the Landover, Md.-based holding company, Eckerd announced in a June 10 press release. Eckerd reported that its "principal lending banks have indicated their willingness to increase the company's existing lines of credit to more than $1 bil." The chain finished fiscal 1984 ended last July with annual and seasonal lines of credit aggregating $324.5 mil. Responding to Dart's announcement the previous week that it had acquired a 5% interest in Jack Eckerd, the chain's board of directors, following a special meeting on June 10, reiterated that Eckerd "is not for sale." On June 5, the Dart Group, which holds substantial positions in Crown Books and Trak Auto and, prior to April 1984, ran Dart Drug, announced in a Securities & Exchange Commission 13D filing that it had purchased 5% of Jack Eckerd (1.9 mil. shares) for approximately $47 mil. That filing by Dart, which is controlled by the Haft family, stated that the Dart board had decided to evaluate Jack Eckerd "both as an investment opportunity and with respect to acquiring 100% of the capital stock." Jack Eckerd also noted that it has initiated litigation in U.S. District Court in Wilmington, Del. "to enjoin further purchases of its stock by Dart Group." According to the release, Jack Eckerd is claiming that Dart's 13D filing "falsely states" that Dart purchased Eckerd stock "for investment when, in fact, its intention was to gain control of Eckerd, or failing that, to extract 'green mail' payments from Eckerd." In addition, the Eckerd complaint alleges that "Dart's statement of investment intent is inconsistent with statements made in its recently filed form 10K that it intends to use its funds to make an acquisition, and that Dart is engaged in an illegal 'creeping tender offer' for Eckerd stock," the release notes.
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