NEW YORK DB — NEW YORK -- May Department Stores is likely to make a major acquisition in the next several months, analysts say.
"May wants to buy something, and they've probably been looking around the country for the best possible department store chain," said Peter Siris, an analyst at UBS Securities.
"The problem is finding something that's available," he said.
"May definitely has the flexibility in its balance sheet to make an acquisition," said Linda Kristiansen, an analyst at Wertheim Schroder.
May is the largest U.S. operator of "conventional" department stores, with 318 stores.
The stores are split among 12 divisions, including Lord & Taylor and Hecht's.
In 1988, May acquired Foley's of Houston and Filene's of Boston for $1.5 billion from Federated Department Stores. More recently, May bought Thalhimers of Richmond, Va., now part of the Hecht's division, which has its headquarters in Washington.
St. Louis-based May recently filed with the Securities and Exchange Commission to sell $402.1 million of debt securities.
When combined with previously registered debt securities that May has yet to sell, the company will soon raise up to $750 million.
In the SEC filing, May said some of the proceeds will be used to retire some of its outstanding commercial paper or other short-term debt. The company said it also will use the funds for corporate purposes, including possible acquisitions.
May spokesman James Abrams declined to comment yesterday acquisition plans.
In an industry characterized by slow expansion, heavy debt and a wave of bankruptcy filings, May has maintained its independence and financial strength, Mr. Siris said. R.H. Macy & Co. and Carter Hawley Hale are the most recent large retail chains to encounter serious financial problems.
May might be interested in acquiring Macy's South, Mr. Siris said. Macy, which filed for bankruptcy protection Jan. 27, might include the sale of Macy's South in its reorganization plan, he said.
"Beside Macy's South, there's not a lot out there that would interest May," Siris said.
Macy's spokesman James Fingeroth declined comment.