Macy's Shares Rise on Buyout Talk

New York, NY, July 9, 2007--Shares of Macy's jumped Friday, as a rumor surfaced that Sears Holdings Corp. chairman and billionaire investor Edward Lampert might be interested in buying the company.

Macy's spokesman Jim Sluzewski said Macy's does not comment on rumors or market activity.

Sears Holdings Corp. spokesperson Chris Brathwaite said the company does not comment on rumors or speculation.

The talk that Macy's was a takeover target first surfaced in June. On Friday, investors speculated that Lampert, a billionaire hedge-fund operator who acquired Kmart in 2003 and Sears, Roebuck and Co. in 2005, might be involved.

"The takeover rumor was doing the rounds a couple of weeks ago," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group. "I don't think (Edward Lampert)'s name was attached before, but now someone has thrown that one out there."

Macy's, previously known as Federated Department Stores Inc., has faced investor scrutiny as it struggles to convert its acquired May Department Stores Co. branches to the Macy's brand, resulting in lackluster sales. The company has also blamed weak demand for home goods.

According to its most recent earnings report, Sears Holdings Corp. had cash and cash equivalents of $3.41 billion as of May 5. Macy's market capitalization is about $19.1 billion.

Macy's shares rose $1.95, or 4.9 percent, to $41.72 in afternoon trading. The stock has traded between $32.57 and $46.70 during the past 52 weeks.

Sears Holdings Corp. rose $5.51, or 3.3 percent, to $173.89. The stock has traded between $137.85 and $195.18 during the past year.