Updated from 11:42 a.m. EST

Ed Lampert came out of stealth mode when he announced the acquisition of

Sears

(S) - Get Report

by

Kmart

(KMRT)

Wednesday.

Long known for silence, Lampert is now the focus of a media frenzy for a deal that has rocked the business world and financial markets. But was he forced into the spotlight prematurely when another shadowy investment powerhouse,

Vornado Realty Trust

(VNO) - Get Report

, encroached on his space?

Vornado, a real estate investment trust run by Steve Roth and Michael Fascitelli, disclosed a leveraged ownership stake of 4.3% of Sears' common stock just two weeks before the mega-merger was announced. Shares of Sears rocketed more than 23% that day as investors speculated that Sears must be sitting on a gold mine in undervalued real estate assets, the same phenomenon that drove Kmart from $15 a share to more than $100 in little more than a year.

Vornado made a fortune after Lampert's merger plans went public. Sears closed up $7.79, or 17.2%, to $52.99, while Kmart added $7.78, or 7.6%, to $109. On Thursday, however, Wall Street began to speculate that Roth and Fascitelli might have been irked by the price they're getting for Sears.

"This is a good result for Vornado, and we have no further comment," said Wendi Kopsick, a spokeswoman for Vornado.

But Citigroup analyst Jonathan Litt noted that Vornado, which controls its Sears stake through an options position, might own more of the retailer than it has let on.

A larger stake could be "sufficient to block, or at least make it harder for the transaction with Kmart to be approved by

Sears' shareholders," Litt wrote.

Moreover, Litt argues that the market is undervaluing some of Sears' assets. The retailer's total market cap is about $11.6 billion, with its real estate worth between $3.9 billion and $6.2 billion, he figures. The rest of the business is valued between $7.2 billion and $12.2 billion, suggesting to Litt a total value of $11.1 billion to $18.4 billion. By Litt's analysis, the real estate represents somewhere from 40% to 60% of the company's market cap.

"The more difficult part for us as real estate analysts is estimating the value of Sears' remaining businesses," wrote Litt. "However, with over $2 billion of net cash on the balance sheet, there is ample margin for a wide range of valuations for the ancillary businesses that support our thesis that the market may be undervaluing Sears' hard assets."

Morningstar analyst Kim Picciola said she values Sears' operational business at $30 a share. That suggests that if Litt's assessment of the real estate value is correct, Sears investors could be getting shafted. But Picciola questions whether the value of the company's real estate is overblown.

"One of the questions we're struggling with is who would really want to buy this real estate, particularly the mall-based stores," Picciola said. "Given trends that show consumers moving to off-mall shopping, who would want to move back into these mall locations? Sears itself is trying to move off-mall."

Based on Litt's math, Sears could be worth as much as $100 a share. If that's the case, Vornado might be able to finance an acquisition of Sears itself using the company's debt-free balance sheet.

That could be why Lampert came out of the shadows on Wednesday, trumpeting a plan to build a new retailing powerhouse that could go head to head with the likes of

Wal-Mart

(WMT) - Get Report

and

Target

(TGT) - Get Report

. He addressed the Vornado stake in a conference call Wednesday.

"We have great respect for both Steve and Mike Fascitelli," Lampert said. "I think that when they reflect on the nature of this deal, and you basically talked about the valuation, the participation, 55% in the upside for shareholders of Sears, has the ability to make this deal worth substantially more than $50

a share over time." (Lampert was referring to the 55% stock portion of Kmart's offer to Sears holders.)

"I think they're very astute. I think they can be short term, they could be long term. They're going to do what makes economic sense, which is why I think they've been so successful over time. And given that I think they are so astute, I think that they will see the same benefits in this combination that we saw."

Richard Hastings, a retailing analyst with Bernard Sands, said Kmart is probably getting a great deal on Sears' real-estate assets.

"There's a difference between estimated book value and market value," Hastings said. "In the case of Kmart, their real estate went beyond speculative value to market value, and that's where the money comes from. In the case of Sears, management didn't do that. They didn't unlock the hidden value in the entity, so they were stuck with the way it looked on paper."

Still, barring an unlikely move from Vornado, Hastings said Sears shareholders should take this deal, because of the company's operational struggles. Sears recently announced that it swung to a third-quarter loss, missing analyst forecasts by a wide margin, and said sales would trail estimates in the all-important Christmas quarter.

"That's an acceleration of the downfall of Sears' operational business," Hastings said. "Meanwhile, Kmart's profitable as a merchandiser, and Sears could be too under Lampert. If the shareholders don't want to get rescued by Kmart, then they're stuck with the company as is. That's not a good alternative, and Lampert knows that."

Citigroup's Litt acts in a fiduciary capacity for an account of a nonprofit organization that holds a long position in Vornado, and Citigroup has an underwriting relationship with Vornado.