May Company Paid Too Much, Some Analysts Say
By Tom Weber, KWMU
St. Louis – Some analysts think St. Louis-based May Company paid too much for Marshall Field's this week.
May said it will pay Target more than $3 billion for 62 stores, mostly in Chicago, Detroit and Minneapolis.
But Howard Davidowitz, with the New York investment firm Davidowitz and Associates, said May only paid that much to ensure it would out-bid its chief rival Federated Department Stores.
"What May Company should do is sell some stores to Federated at a premium price and get back some of the amount they've overpaid and I think there's a chance they'll do that," Davidowitz said.
Davidowitz said he thinks May overpaid because Marshall Field's hasn't been performing all that well in a struggling department store industry.
May already owns a number of chains, including Lord & Taylor and Famous-Barr.
Federated owns Macy's and Bloomingdale's.