Macy’s (M) May Try To Block Martha Stewart (MSO) Deal With PC Penney (JCP)
December 8, 2011 by Douglas A. McIntyreMacy’s (NYSE: M) believe its has some rights to Martha Stewart products which would be violated by a joint venture deal between Martha Stewart Living Omnimedia (NYSE: MSO) and JC Penney (NYSE: JCP) . The venture includes a deal for Penney to buy 16.6% of MSO. This announcement causes MSO share to advance 33%.
Macy’s may take its objections to court. The Penney deal may cause a collapse in the value of Martha Steward goods which have been carried by Macy’s
The objections may not be important. Penney and Martha Stewart are each viewed as weak companies and weaker brands. The JV may do little to reverse the fortunes of either. MSO has struggled with its print media division. Penney recently fired its CEO Myron Ullmann and replaced him with former Apple (NASDAQ: AAPL) retail leader Ron Johnson. The new management cannot offset a drop in Penney sales which has been caused by poor product purchases and competition by Macy’s and big box retailers.
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