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Saks (SKS) Debuts On Takeover Target List

August 31, 2010 11:29 AM EDT
Luxury retailer Saks Incorporated (NYSE: SKS) debuted at number 10 on StreetInsider.com's "Top 50 Takeover Targets" list at M&A Central.

The addition follows published reports that U.K. and U.S. private equity players are ready to table a bid of $1.7 billion, or $11 per share, for the company.

The company wouldn't comment on the story.

While the reports are light on details, the depressed value and current M&A environment support a likely takeover. In addition, Saks has weathered the storm of the recession and is expected to turn a profit on the year.

The reasons Saks didn't rank higher on the editorially reviewed list is due to a number of road blocks including:
1. Saks already has a high debt level, which includes long-term debt of $500 million.
2. Mexican billionaire Carlos Slim controls a large stake that he may not be willing to give up.
3. U.S. economic uncertainty could keep bidders on the sidelines.

Saks could move up the list if the company initiates a sale process or if an actual bid materializes.


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