Citigroup Smith Barney called the Sears-Kmart deal into question yesterday with a research report that suggests the possibility of Vornado Realty Trust and a partner countering Kmart’s $10.85 billion bid for the multichannel marketer.
“We do not believe the Sears/Kmart merger is a done deal just yet,” the report said.
Smith Barney valued Sears overall at between $15 billion and $17 billion, or $70 to $80 per share. The company’s real estate alone is worth between $8 billion and $10 billion. Earlier estimates by Smith Barney put the value of its real estate in the $4 billion to $6 billion range. Also, with broader distribution, Sears’ Craftsman and Kenmore brands could be worth substantially more than currently thought, according to the report.
Given the value of Sears stock, Vornado, which already owns 4.3 percent of Sears, might team up with a private-equity partner or a retailer to bid on Sears. There’s also the possibility that a dark horse bidder could emerge, according to the report.