No Ward & Roebuck

One of Wall Street's oldest rumors was laid to rest last week. Chief mourners were stockholders of Montgomery Ward & Co. Talk that this Morgan-sponsored mail order house would merge with successful Sears, Roebuck was almost as old as the bull market. Negotiations were known to be in progress again this summer when it was said Sears offered one share for each three shares of Montgomery Ward. The Morgan company apparently asked one for two.

Montgomery Ward finally declined to listen to terms of one share of Sears for each two and a half shares of its own stock. When the bigger company was convinced of this its vice chairman, Lessing Rosenwald, said: "We felt that those terms were a very fair proposal. . . ." Sears, Roebuck officials definitely stated that they could not consider a consolidation on any terms less favorable to Sears, Roebuck than the two and a half for one basis. This was one of the rare times that terms had been discussed by officials of either company despite the innumerable outcroppings of the story in recent years.

Difficulties surrounding the merger were obvious and interesting. Montgomery Ward pointed with pride to its strong financial position (on Dec. 31, current assets of $109,000,000 against current liabilities of only $7,821,000) while Sears looked at its own very adequate position, raised its eyebrows at Montgomery's deficit for 1930 and the first half of 1931. Sears had managed to show earnings on its common stock through June 1931.

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