New York, February 1—-According to a report in the Wall Street Journal, price appears to be a prime sticking point in Federated Department Stores’ efforts to acquire May Department Stores.
The newspaper, citing people familiar with the discussions, said Federated chief executive Terry Lundgren met May's acting chief executive officer, John Dunham, last Wednesday in St. Louis to discuss a possible deal.
According to the article, there is no sign suggesting a deal is imminent, and the two differ over the price May would accept for a takeover offer. The article said it is not clear how far apart the two sides are on price.
The talks are complicated by May's search for a new CEO, according to the newspaper, which said its board is assessing potential candidates to see if their turnaround plans can offer more value than a Federated offer. Should the board not feel comfortable with the candidates' proposals, it is likely to move ahead with a sale, the article said.
While May shares have soared during the past few weeks, Federated's have not moved much, the article said, and as a result, the stock market now is valuing May at about $500 million more than Federated. Federated is considering paying largely in stock but adding a cash component to ensure it controls more than half of the combined company, the newspaper said, citing people familiar with the matter.
Federated and May could not immediately be reached for comment.
