Wednesday, June 06, 2007

Could Ackman's Target Be Sears, Not Bud?

According to reports from Chicago Sun-Times, activist investors William Ackman, who runs hedge fund Pershing Square Capital, could target Eddie Lampert's Sears Holdings (Nasdaq: SHLD) for his latest venture that will target just one large "iconic American" company. Yesterday, reports from the New York Post speculated that Anheuser-Busch (NYSE: BUD) would be Ackman's target.

The Chicago Sun-Times noted that last year Ackman won a battle against Lampert's Sears Holdings when the Ontario Securities Commission killed the company's $899 million takeover of Sears Canada. Ackman argued that Sears Canada was worth at least twice what Lampert offered. The article also said Ackman's most successful moves have been at retailers and restaurants.

The original article from the New York Post said that Ackman told investors that the $2 billion raised for the new fund will be used to buy a controlling interest in a $30-$40 billion company and prospective investors said the company has three divisions. Sears does operate three segments: Kmart, Sears Domestic, and Sears Canada and has a market cap of about $27 billion. Anheuser-Busch's market cap is just north of $40 billion.

Other names mentioned as possible targets for Ackman were Starwood (NYSE: HOT), Marriott (NYSE: MAR) and Kraft (NYSE: KFT).
NOTE: Lampert controls 43% of SHLD, so it would look like a nearly impossible feat to get anything meaningful done.

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