Chicago Pacific Corporation
| Chicago Pacific Corporation | |
|---|---|
| legal form | Corporation |
| founding | June 1, 1984 |
| resolution | 1989 |
| Reason for dissolution | Merger with Maytag Corporation |
| Seat |
Chicago , United States
|
| management | Harvey Kapnick |
| sales | $ 1.4 billion |
| Branch | Holding company |
| Status: 1987 | |
The Chicago Pacific Corporation (CPC) was an American holding company that emerged from the remnants of the Chicago, Rock Island and Pacific Railroad railway company .
On March 17, 1975, the Chicago, Rock Island and Pacific Railroad had to file for bankruptcy and on January 25, 1980, the bankruptcy administrator finally ordered the liquidation of the company, as the continued operation of the railway was uneconomical and no buyer could be found for the ailing company. As far as possible, the assets used for rail traffic (railway systems, rolling stock) were sold.
The liquidation of the railway company was completed on June 1, 1984 and the Chicago Pacific Corporation was formed from the existing remnants (primarily real estate and financial assets) under the leadership of the majority shareholder Lester Crown ( Henry Crown and Company ). The company owned solely from the sale a liquid capital of about 330 million US dollars . The former Arthur Andersen & Co. management consultant Harvey Kapnick has been named President and CEO .
Two business strategies were considered in order to use the liquid funds economically. The first strategy was based on acquiring a large company and then achieving the desired company size by subsequently selling subsidiaries. The second strategy was to acquire several smaller household appliances and goods companies and to form a corporate group.
According to the first business strategy, the Chicago Pacific Corporation attempted the hostile takeover of the Textron group in October 1984 . CPC offered $ 1.6 billion. However, the takeover offer failed. The subsequent offer to Scovill Inc. (zippers, haberdashery) was also rejected.
In November 1985, Chicago Pacific Corporation acquired the home appliance company Hoover for $ 535 million and in July 1986 Rowenta from Allegheny International and Rothmans Germany for $ 74 million. In August 1986 the furniture company "Furniture Group of America" with the subsidiaries Pennsylvania House and Kittinger Furniture for 83.5 million dollars was acquired by General Mills Inc. and in December 1986 the furniture company McGuire Furniture for 25 million dollars. The following year, furniture companies Gunlocke were acquired in September and Brown Jordan in November for $ 21 million. In January 1988 the furniture manufacturer "Charter Group" was added.
In the course of 1988 rumors grew that the Chicago Pacific Corporation itself could be a target for a takeover. The owners therefore tried to improve the company's market value accordingly. In July 1988, Rowenta was sold to the French group SEB for 170 million dollars . At the same time, SEB took out loans totaling $ 85 million. Furthermore, a was share split and a share purchase program performed. The dividend was raised by 350% and it was announced that it would buy back some loans.
In October 1988, Chicago Pacific accepted the acquisition of the company by the almost equally large Maytag Corporation for $ 1 billion. Maytag had to borrow $ 400 million for the January 1989 acquisition. In addition, there were loans of around $ 750 million from Chicago Pacific.
In June 1989, the six furniture companies were sold to Ladd Furniture Inc. for $ 213 million to finance the takeover .
Individual evidence
- ^ New York Times April 21, 1984: "A chief is elected by Chicago Pacific"
- ↑ a b c Chicago Tribune August 16, 1987: "Chicago Pacific Switches Tracks"
- ^ New York Times October 25, 1984: "A big Textron bid by Chicago Pacific"
- ^ New York Times November 1, 1984: "Textron rejects takeover bid"
- ↑ Chicago Tribune June 19, 1986: "Rowenta Deal Builds City Firm"
- ↑ a b Chicago Tribune July 2, 1988: "Rowenta Sold To Seb By Chicago Pacific"
- ^ New York Times August 14, 1986: "Chicago Pacific Furniture Deal"
- ↑ Chicago Tribune August 14, 1987: "Area Firm To Acquire Gunlocke"
- ↑ Chicago Tribune November 27, 1987: "Furniture-maker Bought"
- ↑ Chicago Tribune October 3, 1988: "Furniture Industry Gets Comfortable With Mergers"
- ↑ Chicago Tribune September 27, 1988: "Top-price Overture, Chicago Pacific Says"
- ↑ Chicago Tribune October 25, 1988: "Chicago Pacific Accepts $ 1 Billion Maytag Offer"
- ↑ New York Times June 2, 1989: "Ladd-Maytag Pact"
- ↑ Chicago Tribune February 1, 1989: "Maytag To Sell Furniture Units"