JC Penny 'to buy Martha Stewart Living Omnimedia'
Sources told the New York Times JC Penny has made a successful bid for Martha Stewart Living Omnimedia.
JC Penny may have consulted merger and acquisition advisors recently, as it has been reported the company is set to buy Martha Stewart Living Omnimedia for $3.50 (£2.24) a share.
Sources told the New York Times the firm will buy 16.6 per cent of the enterprise at a 12 per cent premium to the stock's closing price on Tuesday (December 6th) – totalling around $38.5 million.
This would buy two seats on the board for officials from JC Penny and the Martha Stewart company expects to receive $200 million from the deal.
As part of a ten-year partnership between the brands, JC Penny would create a new online presence dedicated to Martha Stewart and build in-store areas for the firm's products from February 2013.
The New York Times said neither enterprise would comment on the move, although the sources said talks had been going on between executives for months.
It seems JC Penny may be hoping to boost business, as it reported last week sales fell two per cent in the four weeks ending November 26th, down from a 9.2 per cent increase during the period in 2010.
Posted by Ron Maverick
Source: New York Times, December 7th