announced the acquisition of 54 stores from
Wednesday for up to $620 million, a transaction that was foreseen in stock and options markets three weeks ago.
Kmart, which struck a deal to sell 24 stores to
on June 4, also boosted a repurchase authorization by $100 million and saw its shares pop on the news.
Sears also bought seven
Most of the stores are located in cities with "home, family and income demographics similar to Sears," the company said. The majority are expected to be converted to Sears department stores by the fourth quarter of next year. Sears plans to invest about $200 million to remodel the stores, and the acquisitions are expected to be accretive to earnings in 2006.
On June 8, Sears' generally slow-moving stock jumped more than 5% on rumors it would follow Home Depot's $365 million Kmart deal with a transaction of its own. Both companies saw unusually high call option volume before the rumors died down and Sears' stock price eased back.
In early trading, Kmart was recently up $4.23, or 6.2%, to $72.45. Sears closed Tuesday at $38.26.