(Retail takeover article updated from Dec. 16)

NEW YORK ( TheStreet) -- Did you miss the boat on the Gymboree ( GYMB), J.Crew ( JCG) and now Jo-Ann Stores buyout? If so, there are still plenty of potential retail takeovers making headlines for investors to take advantage.

Jo-Ann Stores announced on Thursday that it is being acquired by private-equity firm Leonard Green in a deal valued at $1.6 billion, or $61 a share. This is a 34% premium over its closing price on Dec. 22.

This is the second retail acquisition by Leonard Green over the past two months, and the third major deal within the sector in the past three months.

Leonard Green, along with TPG, bought J.Crew in November for $2.86 billion, or $43.59 a share, a 16% premium from the stock's closing price on Nov. 22. As part of the deal, Millard Drexler will continue as chairman and chief executive officer and maintain a significant equity investment in J Crew.

This followed the acquisition of Gymboree by private equity group Bain Capital for $1.8 billion, or $65.40 a share. The deal represents a 57.4% premium over Gymboree's share price at the close on Sept. 30, and a 23.5% premium over the close on Oct. 8.

" This is a valuation equal to the most richly valued names in our universe, despite what we believe to be modest growth potential and operating margin expansion," Stifel Nicolaus analyst Richard Jaffe, wrote in a note. "Clearly, private equity investors value these companies more richly than stock market investors."

This level of private equity interest suggests that other companies may also be considered for a takeout, including Aeropostale ( ARO), Chico's ( CHS) and Children's Place ( PLCE), Jaffe notes.

"The depressed valuations held by many publicly-traded apparel retailers, their very good cash flow characteristics, strong balance sheets and attractive earnings leverage, coupled with the low interest rate environment and a preponderance of highly liquid, private equity funds seeking investments creates a favorable environment for both buyers and sellers, in our view," Jaffe wrote.

Jaffe estimates the valuation in a leverage buyout or take-over scenario would be significantly higher than the current share price. But he does warn potential buyers that many retailers' balance sheets look deceptively clean due to store leases that are longer-term commitments and generally not shown as a liability. Though he does not think this should deter buyers.

Here are some retailers that could still be up for grabs...

Office Depot

Office Depot ( ODP) is surging nearly 10% after a filing with the SEC signaled a takeover may be on the horizon.

The office supply retailer entered into a new change-in-control agreement with CFO Michael Newman; President of International Charles Brown; and Steven Schmidt, president, North American business solutions; in order to "diminish the potential distraction due to personal uncertainties and risks that inevitably arise when a change of control is threatened or pending."

As part of the agreement, the three executives are guaranteed employment for a year after a change of control, paying them 12 times their highest monthly salary, plus a bonus equal to the highest received in the prior three years. If they decide to leave, they will get their accrued salary and bonus, plus two times their base salary.

This follows another filing last month that outlined the chief financial officer's retention agreement, which provided for the immediate vesting of his two-year retention payout if his employment was terminated for a reason other than cause.

In October, former CEO Steve Odland resigned a week after settling regulatory charges with the SEC that alleged Office Depot selectively warned analysts about disappointing profits.

Aeropostale

Aeropostale ( ARO) is taking precautions to defend itself over a possible takeover by private equity, according to reports.

The New York Postreported that the teen apparel retailer hired Barclays Capital as a strategic adviser, as management wants to remain publicly traded.

Aeropostale has faced some difficulties in the second half of the year, reporting a 1% decline in same-store sales in November, its second consecutive monthly drop, as well as the departure of Co-CEO Mindy Meads.

"Am I surprised? No," Wall Street Strategies analyst Brian Sozzi says. "There are poor assortments coming up until spring, Meads was just pushed out, the stock is under pressure and management believes it's undervalued. There are classic signs here."

Cost Plus

Cost Plus ( CPWM) might be Bed Bath & Beyond's ( BBBY) next acquisition target, according to an analyst.

J.P. Morgan analyst Christopher Horvers noted that on a recent store visit he saw a Cost Plus World Market store-within-a-store concept inside Bed Bath & Beyond.

This test is currently being performed in only a handful of stores, but could signal Bed Bath & Beyond is considering purchasing Cost Plus.

"In recent years, Bed Bath & Beyond has increased it exposure to the specialty foods category, and now it appears the company is outsourcing some of its learnings," Horvers wrote in a note.

This wouldn't be the first time Bed Bath & Beyond used an acquisition to develop its business. In March 2002 it acquired health and beauty retailer, Harmon, opening a store-within-a-store concept in most of its core locations.

Then in June 2003, Bed Bath & Beyond purchased Christmas Tree Shops, which Horvers said was critical in helping the company's direct sourcing capabilities. "The similarities of these acquisitions are that both Harmon's and Christmas Tree Shops were designed to first improve the core and drive the Bed Bath stores' sales productivity," he wrote.

Bed Bath & Beyond has more than $1 billion in cash and no debt, making it very capable of purchasing Cost Plus, which has a market cap of $210 million.

Barnes & Noble

Borders ( BGP) key shareholder William Ackman said he is prepared to fund a takeover bid for Barnes & Noble ( BKS).

Ackman's Pershing Square Capital Management said it would fund an offer of $16 per share for Barnes & Noble, valuing the deal at about $963.2 million.

The bid would represent a 20.5% premium over Barnes & Noble's closing price on Friday of $13.38.

Ackman owns 37% of Borders shares.

Barnes & Noble put itself up for sale this summer, saying it is considering strategic alternatives for the company. Since the announcement, speculation over potential bidders has run rampant, with the spotlight flashing on private-equity players like Apollo Management. Fears have also grown in certain quarters that Barnes & Noble may not be able to find a buyer, raising a red flag for the entire book industry.

Barnes & Noble's chairman and largest shareholder, Leonard Riggio previously said that he would consider teaming with a group of investors to make a bid on the company that he took public in 1993.

"I fully support the Board's decision to evaluate strategic alternatives at this time," Riggio said in a statement this summer. "Regardless of whether I participate in an investment group that buys the company, I, as well as the entire senior management team, am willing and eager to remain with the company and see it through the challenging years ahead."

Ron Burkle, who waged a proxy battle against Barnes & Noble, was also believed to be eyeing the No.1 book seller.

Build-A-Bear Workshop

Build-A-Bear Workshop ( BBW) is seeking a buyer, according to reports.

The retailer, which allows shoppers to create personalized teddy bears, has approached private-equity firms, Bloomberg reported, citing sources familiar with the matter.

Barclays Capital is reportedly advising the company on a potential sale. Build-A-Bear Workshop has a market cap of $155.7 million.

Susquehanna Financial analyst Thomas Filandro believes a takeover of the company is highly likely, with both private equity or a strategic buyer having interest in Build-A-Bear.

"We believe a deal would make sense for both buyer and seller. Build-A-Bear's high cash flow generation, healthy balance sheet, reasonable inside ownership, unique brand concept offering an emotionally connective product and shopping experience, and brand presence both domestically and internationally, provide a solid platform for future growth," he wrote in a note.

This is not the first time Build-A-Bear eyed a sale. In 2007 the company said it was exploring "strategic alternatives," but that effort did not yield sufficient offers.

"But it was also the early stages of an epic contraction in credit and buyout activity," Needham analyst Sean McGowan wrote in a note.

At the time, Build-A-Bear's shares were hovering around $20. While the company has not recovered to 2007 levels of sales and profits, McGowan says the company is much stronger than it was 12 months ago.

"We believe that with Build-A-Bear's recent results suggesting a turnaround is well underway, and the private equity market for consumer companies showing strength this year, Build-A-Bear could be a good candidate for a buyout," McGowan wrote.

But he warns that a suitable buyer may not offer a price acceptable to the board and shareholders.

BJ's Wholesale

There's some skepticism surfacing of a BJ's Wholesale ( BJ) buyout, after chatter arose regarding a J.Crew ( JCG) takeover by the same private-equity firm supposedly eyeing the wholesaler.

Following reports that J.Crew will be purchased by a private-equity group made up of Leonard Green and TPG Capital, some investors worry Leonard Green will take its focus away from BJ's.

Earlier in the month, it was reported that Leonard Green made a bid for BJ's, and the wholesaler hired Morgan Stanley ( MS) to facilitate a potential deal.

Leonard Green holds a 9.5% stake in the company, upping its holding earlier in the year. At the time, Leonard Green said shares of BJ's were undervalued and that it wished to chat with management about ways to enhance shareholder value.

"These discussions may include a 'going-private' transaction, new financings (potentially through mortgage financings or sale leaseback transactions) or other similar transactions," the private equity firm said at the time.

It is estimated that BJ's, which has a market cap of $2.53 billion, could fetch as much as $3 billion in a deal.

Analysts have predicted that the likelihood of a BJ's takeover is high. "In our opinion, BJ's could be a high single-digit square-footage growth story that would command an above market multiple, particularly as it completes its infrastructure upgrade," Janney Capital Markets analyst David Strasser wrote in a note. "Additionally, BJ's has differentiated itself from Costco and Sam's Club by focusing on consumers vs. business customers."

Strasser envisions a scenario where BJ's, as a private company, takes the earnings hit in the near term by entering new markets, and then grows square footage by predominantly filling in these markets, providing a sustainable square-footage story and solid exit strategy.

But Wall Street Strategies analyst Brian Sozzi, who also believed a deal was probable, is now questioning whether or not Leonard Green's big for BJ's ever really happened.

"I am closely watching BJ's Wholesale shares today for the 'tell,'" he wrote in a note.

Strasser argues that Leonard Green's involvement with J.Crew doesn't change the perspecitve on BJ's.

Leonard Green would need an additional $350 million in equity to participate in a J.Crew deal, Strasser estimates, assuming a price of $43.50 a share, 50%/50% debt and equity, and a 25% Leonard Green stake.

Strasser assumes a BJ's deal would be about $52 a share. Since Leonard Green already has a 9.5% stake in the company valued at $265 million, it would need an additional $1.1 billion of equity for a deal.

"Leonard Green's current equity fund is $5.3 billion," Strasser wrote. We don't know how much of this fund has been invested. However, $350 million, in our opinion, is not going to have a meaningful impact on the outcome of the BJ deal."

This isn't the first time takeover chatter has emerged for BJ's. The rumor surfaced back in 2007, following the resignation of its CEO Mike Wedge.

Children's Place

Children's Place ( PLCE) is being pushed by an investor to consider a merger or other strategic alternatives.

Galt Investment Partner wrote a letter to the children's retailer on Friday saying that while overall it's pleased with the performance of the company, it is concerned that the board is missing "significant opportunities to generate shareholder value, including through a value-maximizing business combination transaction."

Of course, the recent takeover of rival Gymboree, and Berkshire Partners increasing interest in Carter's ( CRI), were no doubt catalysts to Galt's letter.

Galt said that a merger of any combination of the three children's retailers could result in savings of $50 million or more annually. The firm also predicted that based on the price being paid by Bain for Gymboree and the valuation of Carter's, Children's Place could be worth about 45% to 51% more than its current share price of $47.52.

Galt suggests Children's Place hire a financial advisory firm and urged the board to consider a merger with Gymboree or Carter's.

Macy's

After Macy's ( M) reported better-than-expected third-quarter earnings, grumblings and murmurs that the department store could be taken private have begun to circulate among investors and analysts.

NASDAQ analyst Jay Heller told TheStreet that KKR and Carlyle Group could be interested, especially in Macy's international prospects.

Macy's Going Private?

Macy's has seen a tremendous turnaround over the past several months, and in the third-quarter it swung to an adjusted profit of 8 cents a share, handily topping estimates of 3 cents.

Last week, Macy's upped its outlook for the second half of the year, and now expects earnings of between $1.50 and $1.55 a share, from a prior outlook of $1.45 to $1.50 a share. For the year, Macy's is calling for a profit of between $1.94 and $1.99 a share, compared with a previous outlook of $1.89 to $1.94 a share.

Heller predicts Macy's could receive an offer of $34 a share, which would be a premium over its close on Tuesday of $25.22.

Avon Products

Avon Products ( AVP) advanced more than 6% Tuesday morning, following a report that it could be a takeover target.

Britain's Daily Mail newspaper reported that L'Oreal could be one potential bidder, with a cash offer of more than $44 a share. This represents about a 30% premium over Avon's closing price on Oct. 11 of $33.16.

Other potential bidders include Procter & Gamble ( PG) and Unilever, the paper reported.

OfficeMax

OfficeMax ( OMX) could be a candidate for a leverage buyout, according to J.P. Morgan.

Analyst Christopher Horvers "ran the numbers" on the office supply stocks, deeming all of them worth much more than the stocks reflect, but remains predominantly focused on OfficeMax.

Horvers sees significant opportunity for OfficeMax to restructure its business, which is a key factor for private-equity investors. The company is also currently at trough earnings, with substantial operating leverage.

Office Depot ( ODP) and Staples ( SPLS) could be potential buyers of the company, Horvers notes. Consolidation has always been an interest in the space, dating back to the late 1990's, when Staples attempted to acquire Office Depot.

Horvers foresees a possible takeover scenario of $28 a share, which is double its current price.

American Eagle Outfitters

American Eagle Outfitters ( AEO) takeover rumors are popping up again. This time, rumors circulating are claiming private-equity is eyeing the teen retailer, with possible price targets in the low $20 range.

Some are saying a leverage buyout is a more likely scenario.

Options traders are active in the stock today, with 11,000 calls already, compared with just 1,000 puts. Shares of American Eagle are gaining 1.3% to $15.09 in morning trading.

Wall Street Strategies analyst Brian Sozzi said earlier in the month that an American Eagle could be a very real possibility. "Given American Eagle's valuation, in addition to the health of its balance sheet, they are a prime takeover candidate," Sozzi said.

American Eagle's stock has been hammered, down 10.5% for the year-to-date period. Aside from rival Aeropostale ( ARO), it also has the lowest valuation of the teen sector, Sozzi notes.

The retailer also has a lot of cash, no bank debt, viable concepts in its namesake and children's brands and a management team that hasn't executed properly, all of which add to a possible buyout, Sozzi said.

"Department stores shed teen apparel brands years ago and I am sure are dealing with their own headwinds with the consumer spending backdrop and bloated debt positions from years of over expansion," he said.

This would only leave private-equity. One name being thrown around as a potential acquirer of American Eagle is private-equity firm Blackstone Group ( BX).

Still, overall, teen retailers don't make the best takeover targets since their business tends to by cyclical. On top of this, American Eagle Outfitters isn't penetrated internationally, and privaste-equity may not want to pay premium for the company, Sozzi said.

Jaffe notes that American Eagle is tightly controlled by insiders, precluding any transaction without their support. "Anticipating the intent of insiders is challenging and uncertain," he wrote in a note.

Casey's General Stores

A hostile takover of Casey's General Store ( CASY) is heating up.

The convenience store operator confirmed on Sept. 9 that privately held 7-Eleven is the newest bidder, making an offer of $40 a share, or $2.03 billion.

This tops a $38.50 offer from Alimentation Couche-Tard. The Canadian convenience-store operator has upped its bid three times. It originally made an offer of $36 a share back in June and then $36.75 on Sept. 1.

While management insists even the new offer is too low, believing the company is worth more than $40 a share, Casey's is still entering talks with 7-Eleven.

7-Eleven currently has 7,100 stores in the U.S. and Canada, and the acquisition of Casey's would significantly up its footprint.

Couche-Tard, which owns the Circle K brand in the U.S., does not support these talks, saying in a statement: "We believe this is another maneuver orchestrated by the Casey's board to artificially inflate its stock price leading up to the shareholder vote."

On Sept. 23, Casey's shareholders rejected Couch-Tards nominations for the board of directors and re-elected exisitng directors.

Earlier in the month Couche-Tard made an agreement with the Federal Trade Commission allowing it to buy Casey's as long as it sells 25 of its stores and service stations within an unspecified time after closing on an acquisition.

Casey's has seen its sales rebound in recent months, reporting a 15% surge in revenue in its most recent quarter to $1.36 billion. But profit fell nearly 16% to $37.3 million, or 73 cents a share, due to costs related to its battle with Couche-Tard.

Saks

Saks' ( SKS) takeover rumors are being debunked.

According to pHub, the chatter that surfaced earlier in the month claiming the high-end department store may get a $1.7 billion bid, are likely false. According to U.K.'s Daily Mail newspaper, U.S. and U.K. private-equity firms may be eyeing Saks. The consortium has almost completed due diligence on Saks and could table a cash bid worth $11 a share soon, the paper reported, citing sources familiar with the matter.

pHub reported that bankers and PE execs have said the Daily Mail report is not true.

While the company, of course, refused to comment on M&A chatter, CEO Steve Sadove said during Goldman Sachs' Global Retail Conference that he is "focused on shareholder value." "Whether we are a public or private company we wouldn't do anything fundamentally different in how we are running the company," he said.

Takeover speculation has hovered over Saks, popping up several times over the last three years.

Last year Saks discontinued its poison pill, which is put in place to stymie a hostile takeover.

But one potential hurdle for bidders could be billionaire Carlos Slim, who holds a 15.9% stake, and Diego Della Valle, which has a 9.3% stake. The two might be looking for a higher bid on the company.

Saks was taken public in 1996 by Investcorp SA, pricing shares at $25 each.

Earlier in the month, Saks said it narrowed its second-quarter loss as sales improved.

La-Z-Boy

The probability of a La-Z-Boy ( LZB) takeover in the near future is likely, according to Sozzi.

The furniture retailer has improved its operational structure significantly over the past months and it has a highly-recognizable brand name. "Given La-Z-Boy's fine work on reducing manufacturing capacity, re-engineering production processes, stabilizing the retail store base through improved sales techniques, and continued debt pay-down, there is a logical case for a takeover," Sozzi wrote in a note.

La-Z-Boy's stock is down a whopping 55% from its 52-week high, and is trading very close to its book value. Sozzi says this makes the risk/reward favorable for a long-term investor like private-equity.

Still, the company has some kinks to work out, reporting last a week a $200,000 loss, or breakeven per share, in its second quarter.

RadioShack

It seems like a RadioShack ( RSH) buyout is off the table following the company's announcement of a new share repurchase program.

Takeover rumors have been swirling around the electronics retailer after reports surfaced earlier this year that it was being eyed by private-equity firms like Blackstone Group, Kohlberg Kravis Roberts, Bain Capital and TPG.

Best Buy ( BBY) has also been noted as a possible strategic buyer.

But last week RadioShack announced it upped its share buyback program to $500 million from $290 million, and noted that a "significant portion" of the buyback program would commence as soon as practicable.

"We believe RadioShack's large cash position (net cash stood at $250 million as of June) would have been attractive for possible suitors such as private equity firms interested in a possible leveraged buyout transaction," Morningstar analyst R.J. Hottovy, wrote in a note.

Janney Capital Markets analyst David Strasser estimates a takeout price of $25 to $26 a share.

Regardless of whether or not a deal actually goes through, Strasser says the stock will work in investors' favor. "If a deal does not occur, RadioShack will, we believe, implement an aggressive share repurchase program where it could purchase about 10% to 12% of the stock immediately, and could continue to buy back shares in the high single digit percent range each year, supported by solid cash flows."

Netflix

Netflix ( NFLX) rumors of takeover interest by Amazon ( AMZN) surface once every few months, sending shares on an upswing in the process.

But analysts have continuously dismissed these claims. "Amazon would not acquire Netflix for its by-mail business, which will eventually go away ," says Needham analyst Charles Wolf.

While Netflix has a terrific streaming business, its library consists mostly of older film. The company thus can't offer new releases as they come out, due to the expense.

Amazon, itself, has a streaming pay-per-view service for new releases, and it doesn't seem like it faces a barrier in offering older movies as well, Wolf says. "So the company has little reason to buy Netflix. This does not imply that Amazon will actually go this route. But it could with little difficulty."

Still, Netflix has been a terrific growth story. In the first-quarter, the company added 1.7 million new subscribers, its biggest gain in its 11-year history.

The DVD-by-mail retailer had a standout first quarter, earning $32.3 million, or 59 cents a share, a 44% surge over $22.4 million, or 37 cents, in the year-ago period. Analysts were calling for earnings of 54 cents a share for Netflix .

Netflix revenue jumped 25% to $493.7 million from $444.5 million.

Rite Aid

Rite Aid ( RAD) takeover chatter arose after Walgreen ( WAG) purchased Duane Reade in February, leading investors and analysts to start envisioning other possible deals in the drugstore segment.

Despite Rite Aid's internal problems, like its mounds of debt, the drugstore is a strong play, says IBISWorld analyst Toon van Beeck.

As Walgreen ( WAG) and CVS Caremark ( CVS) battle to be the dominant drugstore player, if either one were to acquire Rite Aid's 11.9% market share they would easily overtake the other, van Beeck says.

Walgreen has already said that it won't stop looking for acquisitions, even after its Duane Reade purchase.

But both Walgreen and CVS might come under regulatory fire if they attempted to acquire Rite Aid, says Ryan Thomas, member of the Corporate and Securities practice at Bass, Berry & Sims.

"I don't think all of its assets could be sold off to a strategic buyer," he says. "But Rite Aid can try to shed a meaningful portion of its stores, which Walgreen and CVS would pick up."

Wal-Mart ( WMT) may also be looking into purchasing Rite Aid. The discount giant has a strong pharmacy and drugstore business, but it is nowhere close to being a major player. It could gain this leverage in the market with Rite Aid.

This could also be a prime time for Rite Aid to go private. "It would give Rite Aid the opportunity to clean up out of the public eye and then go up for sell, which is what happened with Duane Reade," Thomas says. "This is more realistic than a strategic purchase."

Regardless of who may or may not be interested in Rite Aid, van Beeck says that decisions about the company's future will need to be made sooner rather than later unless it experiences a miraculous recovery.

GameStop

GameStop ( GME) is a very likely takeover possibility, Needham analyst Sean McGowan says.

While McGowan didn't name any potential suitors, Best Buy has been rumored to be looking into the video game retailer.

"GameStop has a dominant position, generates a lot of cash, and won't get crushed by the competition," McGowan says. "It could throw out even more value if it is bought and doesn't open more stores. There is a lot a buyer could do here."

GameStop also holds a 50% market share when it comes to popular new releases. During the first week of a new games' launch, more people will go to GameStop to purchase the title then anywhere else, McGowan says.

Still, there are negative connotations when it comes to the video game market. Some investors think with the emergence of digital downloads, GameStop will eventually follow the doomed path of Blockbuster ( BBI), McGowan says.

Granted, the market will inevitably one day be smaller for physical video games, but there will always be business for consoles and other hardware, McGowan says.

GameStop could also successfully adapt to the digital shift by adding value to aggregated digital content.

Williams-Sonoma

Williams-Sonoma ( WSM) saw shares and options activity soar this spring, as investors' interest piqued on news that the home furnishing retailer could be acquired.

That wasn't the first time talks of a Williams-Sonoma buyout have made headlines. The company reportedly turned down an offer from Starbucks ( SBUX) back in 1999.

Starbucks, it seems, currently has its eyes on another company: Jamba ( JMBA), owner of Jamba Juice. Shares of Jamba have gained 5% this week over the possibility of renewed interest from the coffee giant.

As for possible suitors for Williams-Sonoma, it doesn't seem like anyone is knocking on its door right now.

-- Reported by Jeanine Poggi in New York.

Follow TheStreet.com on Twitter and become a fan on Facebook.

If you liked this article you might like

Jo-Ann Stores Stock Hits New 52-Week High (JAS)

Jo-Ann Stores Stock Hits New 52-Week High (JAS)

99 Cents Stores Receives Buyout Offer

99 Cents Stores Receives Buyout Offer

Jo-Ann Stores Stock Hits New 52-Week High (JAS)

Jo-Ann Stores Stock Hits New 52-Week High (JAS)

Jo-Ann Stores Stock Hits New 52-Week High (JAS)

Jo-Ann Stores Stock Hits New 52-Week High (JAS)

Jim Cramer's Best Blogs

Jim Cramer's Best Blogs