NEW YORK ( TheStreet) -- Retail takeover activity is heating up in 2011.

After nearly a year of speculation, BJ's Wholesale ( BJ)is finally being purchased. The discounter said on June 29 that it agreed to a $2.8 billion offer made by Leonard Green and CVS Capital.

As part of the deal, the buyout firms will pay $51.25 a share for the warehouse retailer, a 6.6% premium to BJ's closing price of $48.08 on Tuesday.

This was nearly one year to the date that Leonard Green took a 9.5% stake in BJ's.

Timberland ( TBL) also received a bid of more than $2.2 billion from VF Corp. ( VFC). The deal is valued at $43 a share, a 43.4% premium over Timberland's closing price on June 10.

VF, which owns Wrangler, Nautica and The North Face, will incorporate Timberland iinto its outdoor and action-sports business.

Other deals so far in 2011 include skate and surf lifestyle brand Volcom ( VLCM) being purchased by PPR for $607.5 million. PPR, which owns Gucci and Puma, will pay $24.50 per share for Volcom, a 24% premium over its closing price on April 29.

These deals were jump started following the acquisition of J.Crew's by Leonard Green and TPG Capital for nearly $3 billion, as well as the Gymboree sale and buyout (also by Leonard Green) of Jo-Ann Stores.

"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," Stifel Nicolaus analyst Richard Jaffe wrote in a note earlier in the year.

The companies that are most attractive to private-equity bidders are stable, steady producers, says Michael O'Hara, CEO and managing member of Consensus Advisors.

Nomura Securities International analyst Paul Lejuez says he likes companies that act their age, have international opportunity, flexibility and pricing power. "We believe the four characteristics that are attractive to us should also be attractive to private equity," he wrote in a note following the J.Crew deal.

Strategic buyouts are also finally popping up, after private-equity deals have dominated the headlines in the retail sector.

On March 24, Walgreen ( WAG) announced it would purchase ( DSCM) for about $429 million.

Under the agreement, shareholders will receive $3.80 in cash per share, a premium of 113% over its closing price on March 23.

The move could open the floodgates for more strategic acquisitions for those retailers that are seeing stability in their business model and the return of the consumer.

Over the last several years retailers have horded cash and reduced debt significantly, putting them in prime position to make a bid. The retail sector is also growth constrained and many retailers have maxed out opportunities at their core concepts.

If you missed the boat on the deals so far in 2011, click on for other potential takeover candidates...

99 Cents Only Stores

99 Cents Only Stores ( NDN) became the center of more buyout chatter on Sept. 16, as new reports surfaced that private-equity firm Apollo Group is interested in buying the dollar store.

The New York Post said the firm may be looking to make an offer between $22 and $24 a share.

In August, the newspaper reported that the Schiffer-Gold family, which owns about one-third of 99 Cents, was willing to team up with the highest bidder.

This potential offer from Apollo Group would top that of Leonard Green, which made a bid of $1.34 billion for the discounter earlier in the year. At the time, the firm proposed an offer of $19.09 a share. 99 Cents said it would evaluate the potential deal.

But Wall Street has been criticizing the bid as being too low.

99 Cents Stores has been making significant strides to overhaul its business and is about two years away from hitting its stride when it comes to efficiency.

David Gold is the company's co-founder and chairman, while Eric Schiffer, Gold's son-in-law, is chief executive.

Under Armour

Under Armour ( UA) is rumored to be a potential takeover target for Nike ( NKE), according to reports.

According to The London Times, Nike is reviewing an acquisition of Under Armour and has been considering a deal for several months. The athletic apparel and footwear company could attract a bid more than $100 a share, according to the newspaper.

This comes after Under Armour announced last week that it is realigning its management team to focus on key growth opportunities.

A merger of the two behemoths would provide Under Armour with the international presence it is currently lacking and Nike with new products for its global markets.


Women's apparel retailer Talbots ( TLB) adopted a poison pill on Aug. 2, as hostile takeover fears loom.

Private-equity firm Sycamore Partners accumulated a 9.9% stake in Talbots and said it would seek to talk to the retailer's management about strategy and operations. Sycamore is now the second largest shareholder behind OppenheimerFunds.

Sycamore said it believes Talbots is undervalued.

The move has ignited chatter that Sycamore may use the stake to eventually acquire the company. As a result, Talbots adopted the rights plan, which is triggered if an investor acquires 10% or more of common shares. This will not be applied to OppenheimerFunds, which already holds a 10.3% stake.

Talbots said it adopted the rights plan "to promote fair and equal treatment of the company's stockholders in light of a recent rapid accumulation of a significant percentage of the company's outstanding common stock."

Office Depot

Office Depot ( ODP) may be ready to merge with its rival OfficeMax ( OMX), according to an analyst.

According to Theflyonthewall, Oppenheimer said that after meeting with Office Depot, it appears the company's CEO might be open to industry consolidation. The firm also notes that management's tone indicates sales growth at Office Depot will remain soft in the near term.

Office Depot named Neil Austrian as CEO earlier in the year, after he had been serving as interim chief for seven months. Austrian replaced Steve Odland, who abruptly resigned last year.

At the time of the appointment, analysts believed it was yet another sign that M&A activity is heating up in the office supply sector.

"We view this appointment as a positive indication that Office Depot is open towards sector consolidation," Credit Suisse analyst Gary Balter wrote in a note at the time. "Office Depot's board of directors may have been faced with a lack of candidates that it felt could engineer a turnaround. Rather than look outside the space or hire a less-than-ideal fit, Office Depot stayed internal with the highly capable Mr. Austrian."

But Balter notes that he did not get the sense that Austrian wanted to run the office supply chain over the long run, which could also be another possible signal of its openness toward consolidation. Hiring someone from outside the company may have prevented the merger for a few years, allowing the new leader time to turn around the business, Balter said.

Office Depot caught investors' interest at the end of December, 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 Chief Financial Officer Michael Newman, president of International Charles Brown, and Steven Schmidt, president of 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 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.


Cartier owner may be looking to add another high-end jeweler to its portfolio.

Takeover chatter has resurfaced that private-equity firm Richemont is eying an acquisition of Tiffany ( TIF).

"I think anytime you get a dip in Tiffany shares, a global luxury goods retailer such as Richemont should take notice," says Wall Street Strategies analyst Brian Sozzi. "It would be a large, large deal. Tiffany would need a massive takeover premium, and I couldn't argue against them demanding that. It operates a true wide-moat business, affording it pricing power. It has an increasingly global business consisting of more productive, smaller stores. A Richemont would have to pay up to get those things."

Reports initially suggested that PPR was interested in the luxury jeweler.

Tiffany has been working to expand its watch business, so combining with Cartier, which is famous for its watches, may not be that far fetched. Tiffany recently formed a joint-venture with Swatch.

Polo Ralph Lauren

A Paris-based apparel and accessories group is eyeing a luxury acquisition, with one possible target being Polo Ralph Lauren ( RL), according to reports.

Other potential targets include Hugo Boss, Burberry and Prada, which is currently pricing its initial public offering in Hong Kong, according to La Tribune.

But a deal would only be possible once PPR finds a buyer for its catalog business, Redcats, its books and electronics retailer FNAC, and its remaining stake in CFAO, an African distribution business, the newspaper said.

PPR recently acquired Volcom for $607.5 million.


Off-price apparel retailer Syms ( SYMS) announced on May 26 that it is mulling the possible sale of the company.

The company has been struggling with losses since it acquired Filene's Basement out of bankruptcy protection in 2009 for $62.4 million. In its quarterly filing in May, Syms said it "cannot guarantee that we will return to profitability in the short-term."

Syms is also considering other strategic alternatives, and said it hired Rothschild Inc. as an advisor.

Earlier in the month, Bloomberg News reported that Capstone Equities Capital management sent Syms a letter pressuring the retailer to "enhance shareholder value," with steps such as assets sales.

Investors believe Syms will garner more money if it is sold off in pieces rather than if only bids for the entire company are accepted, according to the New York Post.

Charming Shoppes

Charming Shoppes ( CHRS) surged on May 23, after reports surfaced that the women's apparel retailer may be looking to sell off its Fashion Bug chain.

Bloomberg News said a deal could come in a matter of weeks. Moelis & Co. is advising the retailer on a possible deal, the news story said, citing a person familiar with the matter.

Fashion Bug targets women between 30 and 50. In 2010, the chain accounted for about one-third of Charming Shoppe's $2 billion in sales. The chain, which boasts about 740 locations, reported a 4% jump in same-store sales last year.

Barnes & Noble

After nearly a year on the block, Barnes & Noble ( BKS) may finally be sold off.

The book-selling giant received a $1 billion bid from Liberty Media on May 19. The deal, which must be approved by Barnes & Noble's board and its biggest shareholders, Leonard Riggio, Yucaipa and Aletheia, is worth $17 a share, a 20% premium over its closing price of $14.11 on May 19.

>Barnes & Noble Bid: Can Beggars Be Choosers?

As part of the deal, Liberty would receive equity ownership of about 70% of Barnes & Noble. Liberty expects its cash contribution to be around $500 million "depending on the amount of financing that can be obtained."

Barnes & Noble is reviewing the offer and said the proposal is contingent on the participation of its chairman, Leonard Riggio,"both in terms of his continuing equity ownership and his continuing role in management."

Most sell-side analysts, however, criticized the bid as being too low, citing upside potential from Barnes & Noble's Nook e-reader.

Barnes & Noble put itself up for sale in August 2010, saying it is considering strategic alternatives for the company. Since the announcement, speculation over potential bidders has run rampant, with private-equity names like Apollo Management popping up, as well as know bankrupt rival Borders. But Liberty Media's offer is the first one to show any legs.

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.

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

Big Lots

Big Lots ( BIG) may be winding down its auction to sell itself, as reports surface that the company did not receive high enough bids.

The Wall Street Journal reported on May 19 that the discounter decided not to sell itself, citing sources familiar with the matter. According to the article, private-equity interest waned due to concerns about the price.

Earlier in the year, reports surfaced that Big Lots was approached by Thomas H. Lee Partners and Bain Capital.

Wall Street Strategies analyst Brian Sozzi says Big Lots is a comparable investment opportunity to Jo-Ann Stores. The stock lagged the broader S&P 500 in 2010, has "behind the scene catalysts" being ignored by the market, and the multiple is similar to Jo-Ann's prior to the transaction being announced publicly.

Big Lots was a standout in the early part of 2010, as it won shoppers seeking bargain basement buys. But things went downhill in April as consumers traded back up, with same-store sales slowing noticeably and the stock falling nearly 10%.

In an effort to tackle sales of consumables, CEO Steve Fishman recently let go of two top buyers and promoted internal employees to fill the roles.

In 2010, Big Lots opened 40 stores and is poised to accelerate growth this year and in 2012.


Gap made headlines on May 4 when chatter arose that privately held fast-fashion retailer H&M was eying the company as a takeover target.

While H&M's management told Reuters that there's "no basis" for this rumor, this does not mean Gap may not be a takeover target for someone.

Sozzi says private-equity firms could be interested in the specialty apparel giant.

While Gap has been struggling domestically, the company is aggressively pursuing international expansion, which could present a prime opportunity.


Accessories retailer Delia's ( DLIA) is up for sale, according to reports.

The New York Times reported that Delia's, which has a market cap of about $60 million, is being eyed by prospective buyers that include private-equity firms.

Delia's is also considering other options, including raising capital, according to the report, which cited sources familiar with the matter.

Delia's operates about 115 stores in 33 states. In the first nine months of 2010, the company lost $22 million.


Sears' ( SHLD) decision to hire a CEO with no merchandising experience has raised speculation on Wall Street. Does Eddie Lampert have an alterior motive?

After three years of searching for a new leader, Lampert settled on Lou D'Ambrosio, previously head of Avaya, a telecommunications company. He succeeds Bruce Johnson, who had been operating as interim CEO since 2008.

D'Ambrosio has been working with Sears over the past six months as a consultant to the board of directors on strategic and operational initiatives.

Prior to joining Avaya in 2002, D'Ambrosio spent 16 years at IBM. This begs the question: Why is Lampert bringing in someone without a retailing background?

In his letter to shareholders, Lampert made a point of noting more than once that D'Ambrosio led Avaya as it went private, "delivering attractive returns to its shareholders." This could be interpreted that Lampert's real goal for Sears is to take the company private, not to bring it back to retail dominance.

CNBC's Herb Greenberg suggests that Lampert hired D'Ambrosio to conduct a "creeping LBO."


Can this be the year GameStop ( GME) is actually bought out?

The video game retailer has been in the M&A spotlight for over five years, with rumors resurfacing once again in early February.

The resurgance in takeover chatter followed a Securities and Exchange filing where GameStop announced a change in agreement with some of its top leaders. The video game retailer amended its agreements with R. Richard Fontaine, Chairman, International; Daniel DeMatteo, Executive Chairman; J. Paul Raines, Chief Executive Officer; Tony Bartel, President; and Robert Lloyd, Executive Vice President & Chief Financial Officer to eliminate the right of each executive to terminate his employment agreement as a result of a change-in-control of the company.

The amendment also removed the automatic renewal provision of each agreement, except in the case of Fontaine, whose agreement didn't contain that particular provision.

"This release should fuel more conjecture over an LBO, as any financial buyer would need assurance that management will not leave," Janney Capital Markets analyst, Tony Wible, wrote in a note.

"At current prices, we believe GameStop presents an attractive target for an LBO given its low levels of debt, healthy cash flow and low equity multiple," Wible continued.

Best Buy ( BBY) is frequently named as its most likely suitor, and when the electronics retailer reported disappointing third-quarter earnings results, some analysts said the acquisition of GameStop could help revive its stumbling business.

"In order to continue to grow, we think that it is essential that Best Buy rapidly expand its strip mall presence, and we think that a combination with GameStop would accelerate its growth plans," Wedbush analyst Michael Pachter wrote in a note. "Through such a combination, Best Buy would acquire thousands of strip mall locations, and could cherry-pick conversions to the Best Buy Mobile format while managing the migration of video game sales to online distribution. The company could buy GameStop for a modest amount, and could learn a few things about games from a capable management team."

While Pachter said he has no reason to believe a merger between the two is imminent, he does think the union makes "eminent sense."

OfficeMax OfficeMax ( OMX) takeover speculation is being renewed after Morgan Stanley recommended buying three-month calls on the office supply retailer on the potential for a buyout.

Equity derivatives strategists Sivan Mahadevan and Christopher Metli screened companies that have elevated analysts' profit estimates relative to book value, low sales growth, high volatility and high trading volume. The two note that OfficeMax has risen 36% since the end of 2009.

In October, J.P. Morgan also noted that OfficeMax could be a candidate for an LBO. 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.

A buyout of OfficeMax has been on the minds of Wall Street since 2007, following a report from Credit Suisse that said it expects to see more mergers in the office supply space.


Saks ( SKS) takeover chatter quieted toward the end of 2010, but Morgan Stanley believes its is still an M&A option.

Equity derivatives analyst Mahadevan and Metli call out the high-end department store as a stock investors should buy, noting that shares have rallied 79% since the end of 2009.

Saks has made one of the biggest recoveries among retailer in 2010, and its rebound may spark interest from potential buyers.

But the high-end department store is no stranger to takeover speculation, with rumblings dating back to 2007.

Earlier in the year U.K.'s Daily Mail reported that U.S. and U.K. private-equity firms were eying Saks for a $1.7 billion bid. But that chatter proved to be false.

Then in October, Italian businessman Diego Della Valle raised his stake in Saks to 19% -- a move that prompted yet another flurry of takeover speculation. CEO Steve Sadove declined to comment on the rumors.

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

J.C. Penney

J.C. Penney ( JCP) has been added to the radar on Jan. 12 as possible takeover candidates after Morgan Stanley added the department store to its list of companies to buy on M&A potential.

Earlier in the week the company saw a shakeup in its executive ranks, with Robert Cavanaugh stepping down as CFO after 32 years with the company. He is replaced by Michael Dastugue, who most recently served as senior vice president of finance.

Peter McGrath also retired on Dec. 31 after 37 years with J.C. Penney. He is succeeded by Ken Mangone, who was named executive vice president of product development, design and sourcing.

In October J.C. Penney adopted a poison pill to fend off a hostile takeover after hedge fund manager William BAckman and Vornado Reality Trust accumulated large ammounts of stock.

Abercrombie & Fitch

Abercrombie & Fitch ( ANF)is a premium name that may be attractive to private-equity firms in the New Year.

The teen retailer has rallied on speculation that it could be a takeover target following a report issued by Goldman Sachs ( GS) that examined the potential for a leveraged buyout.

Over the past several months Abercrombie & Fitch has seen its domestic business slowly recover. While its store base may be saturated in the U.S., the company has substantial opportunities overseas, with international growth at the forefront of its initiatives.

The privatizing of J.Crew will allow the company to grow its Madewell and Crewcuts concepts out of the harsh gaze of investors, who in the short-term, have predominantly ignored the long-term benefits of the chains. Similarly, Abercrombie & Fitch, if taken private, would be able to aggressively close stores, more than it probably would as a public company, without igniting fear on Wall Street. Closing 300 stores (which analysts say is much needed) would result in a charge to earnings, which would just raise a red flag among investors in a public forum.

Wall Street has estimated that Abercrombie & Fitch could garner $60 a share, while other experts are predicting it could fetch as much as $75 a share.


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

The New York Post reported in December that the teen apparel retailer hired Barclays Capital as a strategic adviser. If this report is accurate, it would be a clear sign that management will fight to keep the company publicly traded.

Aeropostale is showing many of the classic signs of a buyout target, said Wall Street Strategies analyst Brian Sozzi. "Am I surprised? No. There are poor merchandise assortments coming up until spring, Meads was just pushed out, the stock is under pressure and management believes it's undervalued."

The company also holds significant growth potential with its newest children's concept P.S.

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.

The company also announced on Dec. 22 that Marc Miller, who most recently oversaw strategic planning and business development, will take over as chief financial officer. He will replace Michael Cunningham, who will assume new responsibilities related to planning, construction and real estate.

Wall Street has estimated that an Aeropostale deal could be worth $40 a share.

American Eagle Outfitters

An American Eagle Outfitters deal didn't take flight in 2010, but the new Year could give a possible takeover some wings.

Investors should keep a close watch on this stock, as reports note that private-equity is eying the teen retailer, and estimates possible price targets in the low $20 range.

Sozzi said in the third quarter that an American Eagle deal 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."

Aside from rival Aeropostale, it also has the lowest valuation of the teen sector, Sozzi noted.

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.

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 earlier in the year.

Children's Place

If at least one investor group has its way, Children's Place ( PLCE) will consider a merger or other strategic alternatives.

Galt Investment Partner wrote a letter to the children's retailer in November 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.

Goldman Sachs previously estimated that Children's Place could be worth up to $75 a share in a buyout. The brokerage firm also assigned the company with a "potential M&A ranking" of 2, which suggests the probability of about 15% to 30% for a takeover bid.

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 in December 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 learning's," 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, the home goods retailer 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.

In June 2008, Cost Plus rejected a takeover offer from Pier 1 Imports ( PIR), saying the offer was "ill-timed."

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.

Avon Products

Could the merger of two major beauty players result in an ideal makeover? We may find out in 2011, with the possible acquisition of Avon Products ( AVP) by L' Oreal .

The Daily Mail reported in October that L'Oreal is preparing for a cash offer of more than $18.8 billion, or $44 a share for Avon.

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

"It would shock me if Avon continued to maintain its independence," Jim Cramer said on the Oct. 18 episode of "Mad Money". "Avon's too valuable. I think they either get rid of management or it gets a takeover bid. There's too much longer term value there so I will say buy, buy, buy AVP."

Casey's General Store

Casey's General Store ( CASY) drives a hard bargain.

The convenience store chain has rejected several bids ranging from $36 to $43 a share.

In an effort to block a takeover by Alimentation Couche-Tard, Casey's has also repurchased 13.2 million of its shares for $38 each, as part of its larger $500 million stock buyback. Couche-Tard has upped its bid several times following its original offer of $36 a share it made back in June.

And in November, Casey's ended talks with 7-Eleven, saying its $43 offer was not good enough.


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 40% 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 $200,000 loss, or breakeven per share, in its second quarter.

Rite Aid

Can a buyout heal Rite Aid's ( RAD) ailing problems?

The drug store chain was pegged as the next likely takeover within the sector following Walgreen's ( WAG)purchase of Duane Reade back in February.

Analysts have said this could be the prime time for Rite Aid to go private, giving it the opportunity to clean up its act out of the private eye and then put itself up for sale, which is what Duane Reade did.

Aside from private equity, rivals Walgreen and CVS Caremark may also eye Rite Aid in an effort to boost their market share. If either were to acquire Rite Aid's 11.9% share, they would easily overtake the other.

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.

Most recently, Rite Aid cut its 2010 outlook, and is now expecting a loss of between 60 cents and 74 cents a share, from previous guidance of a loss of 46 cents to 67 cents. The company also said fourth-quarter same-store sales will miss estimates and it expects to fill fewer prescriptions in 2011 than previously forecast.

In its third quarter, Rite Aid reported a loss of $79.1 million, or 9 cents a share, compared with a loss of $83.9 million, or 10 cents, in the same period last year. While the company managed to narrow its loss, revenue still dropped to 2.3% to $6.2 billion and same-store sales slipped 1.3% during the period.


Has the RadioShack takeover hype finally subsided?

The electronics retailer received the most M&A attention in 2010, after reports surfaced earlier that it was being eyed by private-equity firms like Blackstone Group, Kohlberg Kravis Roberts, Bain Capital and TPG. Best Buy ( BBY)was also named as a possible strategic buyer.

At the time Strasser estimated a takeout price of $25 to $26 a share.

But when RadioShack announced it upped its share buyback program to $500 million from $290 million, investors believed the deal was off the table.

Since then, chatter surrounding RadioShack has been quiet, but the New Year could reignite this interest.

--Written by Jeanine Poggi in New York.

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