Sears-Kmart merger clears antitrust deadline

THE BALTIMORE SUN

DETROIT - The Kmart-Sears merger cleared its first regulatory hurdle yesterday, as the deadline passed for the government to raise antitrust concerns under the federal Hart-Scott-Rodino Antitrust Act.

The companies still need shareholder and other government approvals to consummate the deal, which is expected to conclude in early March. The merged company would be known as Sears Holdings Corp.

At the same time, there was new speculation that another offer could emerge for Sears Roebuck and Co., as an analyst who raised the possibility that Kmart Chairman Edward Lampert could get a run for his money from Vornado Realty Trust, which disclosed Nov. 5 a 4.3 percent stake in Sears. Lampert, the majority shareholder of Troy, Mich.-based Kmart, also has a 15 percent stake in Hoffman Estates, Ill.-based Sears.

Prudential Equity Group analyst Wayne Hood - who predicted Kmart would declare bankruptcy just weeks before it did so in January 2002 - said Wednesday that "Vornado could be positioning itself to make a second bid for Sears."

But another retail industry expert doubts that a derailment of the Sears-Kmart merger is on the horizon. "This deal, in my view, is going through," said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment banking firm in New York. "This is a done deal."

Vornado filed a $7.5 billion registration with the U.S. Securities and Exchange Commission late Wednesday consisting of $5 billion in debt and $2.5 billion in equity. The registration positions Vornado to sell shares, but it did not indicate what it planned to do with proceeds.

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