Corporate Take-overs
In the 1980s Campeau embarked on a series of leveraged buyouts (LBOs), first bidding unsuccessfully on the Royal Trust company (now part of the Royal Bank).
As his business expanded, Campeau ventured into the United States, looking for acquisitions that would add shopping mall real estate to his portfolio of assets. Through junk bond LBOs which were at their most popular in the mid 1980s, his Campeau Corporation 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, 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.
"Any corporate executive can figure out how to file for bankruptcy when the bottom drops out of the business. It took the special genius of Robert Campeau, chairman of the Campeau Corporation, to figure out how to bankrupt more than 250 profitable department stores. The dramatic jolt to Bloomingdale's, Abraham & Straus, Jordan Marsh and the other proud stores reflects his overreaching grasp and oversized ego"
Read more about this topic: Robert Campeau
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