Shareholder List Key to Barington's Dillard's Campaign

After launching a public activist campaign to press for changes at department store chain Dillard’s Inc. last month, Barington Capital Group LP has taken their insurgency up a notch.

The activist group, founded by director James Mitarotonda, on Tuesday afternoon asked Dillard’s to provide it with a list of shareholders, according to a filing with the Securities and Exchange Commission.

The request indicates to many observers that Barington and its partner, the Clinton Group, who together own a 5.2% stake, are on the verge of launching a proxy contest to install director candidates to the Little Rock, Ark.-based company’s board. (Having a list of shareholders enables Barington to identify reach out to other investors and gain support for their endeavors).

The company has a duel-class stock structure which gives the founding family control over the chain and eight of its 12 board seats. But Barington and Clinton may seek to put a minority slate of directors on the company’s board.

Analysts at Credit Suisse seem to think so as well.

“We estimate that as of 12/31/07, 12% of Dillard’s shares outstanding were held by institutions that could be classified as potential activists. With Dillard’s proxy statement to be filed in late April and annual shareholders meeting usually scheduled for mid-May, we believe there is likely to be an attempt from activist holders to acquire at least one independent directors’ seat. While company insiders control 2/3 of the voting stake, the reminder that there exists a vocal minority could attract some attention to these shares,” a March 4 Credit Suisse report wrote. -- Ron Orol