Originally created 05/30/97

Revco shareholders approve sale to CVS



TWINSBURG, Ohio - For employees at Revco D.S. Inc., Wednesday's long-anticipated decision by shareholders to sell the company wasn't such a bitter pill to swallow.

On the contrary, the vote actually came as a relief for many at the drugstore chain's company headquarters in Twinsburg.

"We're glad there's a final word," said Clifford Pae, 39, who has worked in Revco's allocations department for four years. "It's essentially an ending."

During a special meeting Wednesday at the Marriott Hotel in Beachwood, shareholders approved the sale of Revco to CVS Corp. of Woonsocket, R.I., for $2.8 billion in stock and the assumption of $900 million in debt.

The meeting, essentially a legal formality, took less than five minutes and was attended by fewer than 30 shareholders, most of whom were Revco employees.

CVS' board of directors approved the purchase at a special meeting Tuesday. The only remaining hurdle for the sale is approval from the Federal Trade Commission.

Although CVS officials announced they have a tentative agreement with the FTC that is simply awaiting the commission's vote, the commission did not act on the agreement Wednesday at its regularly scheduled board meeting.

The agency's decision, however, is still expected this week.

The New York Stock Exchange said Wednesday that it expects to remove Revco from its list today. Standard & Poor's Co. announced it would replace Revco with Capital One Financial Corp. in its S&P MidCap Index.

Once the FTC approves the sale, the new chain will have headquarters in Woonsocket, eliminating about 1,100 jobs at Revco headquarters in Twinsburg.

Most of Revco's 2,200 stores and its 32,000 workers will not be affected by the change.

Employees at the Revco headquarters say they've been told the gradual closure -- and subsequent elimination of their jobs -- will start in September and continue into early next year.

Revco's top management, including D. Dwayne Hoven, president and chief executive officer, will leave the company effective Saturday. Hoven declined to comment Wednesday after Revco shareholders approved the sale.

Revco spokesman Thomas Dingledy said that with 65 percent of the outstanding shares voted, 92 percent were in favor of the deal -- which would pay shareholders about $40.64 a share.

"It's sad," said Revco shareholder Myra Rachow, who attended the meeting. "It's a very good company. And now you wonder what will happen to the (Revco) marathon and all the other charities."

Marion Polack, a Revco shareholder from South Euclid, agreed, adding that she became an investor on the advice of Rachow.

"It just looks like a good company," she said. "And they always treated us so well at the meetings."

Revco co-Chairman Sam Zell, who controls about 19 percent of the company and was seen as the driving force behind the deal, did not attend the meeting. The only directors to face the shareholders were Hoven and Carl Bellini, Revco's executive vice president and chief operating officer.

The news traveled quickly back to Twinsburg headquarters, where most workers took it in stride.

Those who were spooked by the pending sale left months ago, Pae said. But those who stayed, for the most part, aren't too worried about the imminent loss of their jobs.

"We have good credentials," Pae said. "Revco's got a good reputation in the community."

And, in fact, a company recently contacted the Twinsburg Chamber of Commerce to ask about holding a job fair in town, largely so it could recruit departing Revco employees, said Elizabeth Murch, the chamber's executive director.

CVS also is offering outplacement services and career counseling to help Revco employees find new jobs.

City officials, who also have been awaiting the official news for months, don't seemed worried about the closing of the headquarters -- and the resulting loss of about $1 million in tax revenues annually.

"Luckily, we still have industry coming to town," Mayor James Karabec said. "In a year or two, it will hopefully offset the loss."

As for the lost jobs, Karabec said, the area has plenty of opportunities. "This is one of the lowest unemployment areas," he said.

Some Revco workers, such as Kristine Kelleman, say they want to use the closing of Revco as a chance to explore new career options.

Kelleman works as a support services representative in the third-party billing department.

"I want something that's not just a sit-down job," said Kelleman as she and several fellow employees walked around the parking lot Wednesday during their lunch break.

Kelleman and her co-workers said Revco's demise doesn't worry them anymore. After all, they've been through all this before.

In November 1995, archrival Rite Aid Corp. offered to buy the company for $1.8 billion. That deal, however, fell through because of the FTC's antitrust concerns and a threatened lawsuit by several state attorneys general.

This time around, however, the process has been much easier on employees, several said.

"CVS is handling it much better than Rite Aid," Kelleman said.

"We feel more respected this time," agreed Sue Carlson, who's worked at Revco for 19 years.

Although workers have been waiting to see what happens, deep down they knew the end was inevitable.

"The second time through, I kind of believed that CVS wasn't going to stick their necks out," Pae said.