Campeau Corporation - Corporate Take-overs

Corporate Take-overs

In the 1980s Campeau embarked on a series of leveraged buyouts, first bidding unsuccessfully on the Royal Trust company (now part of the Royal Bank). Its founder's brash, confrontational manner made him an outsider to much of the conservative Canadian business establishment.

As his empire expanded, Campeau ventured into the United States, looking for acquisitions that would add shopping mall real estate to his portfolio of assets.

Through massive junk bond LBOs which were at their most popular in the mid 1980s, Campeau gained control of Allied Stores and Federated Department Stores, owner of Bloomingdale's. Campeau retained famous banker Bruce Wasserstein to assist with the transactions. However, in the overenthusiasm and high leverage that defined banking in the late 1980s, the debt obligations that needed to be covered following the merger were too large and exacerbated by a market downturn that hurt retail sales. Campeau Corporation was unable to meet its debt obligations. Federated and Allied eventually filed for bankruptcy reorganization. The company was eventually acquired by the Reichman brothers who went bankrupt themselves and Campeau Corporation ceased to exist.