This column was originally published on Street Insight on Jan. 11 at 7:21 a.m. EST. It's being republished as a bonus for TheStreet.com and RealMoney.com readers. For more information about subscribing to Street Insight, please click here .
All too often, the media and investors merely speculate about potential takeovers and start rumors. I, on the other hand, prefer to contemplate what would make a nice corporate match in a Yenta the Matchmaker-type way. Here is my list of five mergers and acquisitions that make sense to me -- with the reasons why, and the reasons why they might not happen: 1.Sears Holdings ( SHLD) to acquire warehouse retailer BJ's Wholesale Club ( BJ). Why it makes sense: Sears still has underperforming stories -- or Kmart-Sears stores that are cannabilizing one another -- and it's in the process of transforming them into new concepts or selling off their real estate. BJ is dwarfed by Costco ( COST). Sears can buy BJ and expand BJ, utilizing those superfluous Kmart-and-Sears stores to capture more of the fast-growing warehouse business from Costco and Wal-Mart's ( WMT) Sam's Club. Currently, BJ's market cap is just under $2 billion. Sears has the cash and stock currency to easily pay a 20% premium to BJ shareholders and still make an accretive acquisition. Why it might not happen: Sears' Eddie Lampert is focused on improving the merchandising in existing Sears stores and continues to experiment with new concepts such as in the Gwinnett Place Mall. 2.Morgan Stanley ( MS) to acquire an investment adviser: Legg Mason ( LM) or T Rowe Price ( TROW). Why it makes sense: The missing ingredient in MS' mosaic of businesses is asset management, and it's a glaring hole. MS must make inroads into this segment if it truly wants to compete with Merrill Lynch ( MER) and Goldman Sachs ( GS). John Mack brought in James Gorman from Merrill a few years ago, and he would be the right person to spearhead this effort.