New York, NY, February 22--According to a report in the New York Times, May Department Stores said it has suspended its search for a new chief executive officer as merger talks with Federated Department Stores advanced.
Gene Kahn resigned as May's chairman and CEO in January, and the retailer had started a search to find a replacement.
But the Times said May told the recruitment firm it had hired to "put the search on the back burner" while it talks with Federated.
The two companies could not immediately be reached for comment.
May and Federated have held informal merger discussions in recent months as the department store chains sought ways to expand their geographic reach, sources familiar with the situation have told Reuters.
According to the Times, the talks between Federated and May gained momentum over the weekend.
The newspaper, citing one executive, said May has been holding out for a price "north of $40 a share." According to the article, Federated had indicated it wanted to pay in the mid-30s, but in recent days indicated it may be willing to stretch and May has been more willing to compromise.
Shares of May closed on Friday up 6.1 percent at $33.45 and Federated closed down 1.1 percent at $56.72.
