Unsolicited J.C. Penney Offer Rejected By Dayton Hudson

MINNEAPOLIS - Dayton Hudson Corp. said it rejected a buyout proposal valuing it at $6.82 billion from J.C. Penney Co., saying it prefers to remain independent.

Dayton Hudson said the two retailers have not talked since February, when its board unanimously and quickly rejected the unsolicited stock-and-cash proposal that valued it at $90 to $95 a share.

The offer comes amid frenzied consolidation in the industry as retailers - particularly department-store chains - turn to acquisitions as a way to grow in the saturated U.S. market.

A combined Dayton Hudson and J.C. Penney - the nation's fourth- and fifth-largest retailers, respectively - would have about $44 billion in sales and 2,300 stores. That would rank only behind Wal-Mart Stores Inc. in sales.

Dayton Hudson has struggled with weak sales the past year. While its Target stores have had strong sales, its Mervyn's stores have barely met sales goals.

J.C. Penney, which has 1,238 stores, has had five straight quarters of declining earnings.