Wal-Mart Stores, Inc. (NYSE:WMT) could be a potential wild card in the newly stoked Family Dollar Stores, Inc. (NYSE:FDO) bidding war. In fact, Wal-Mart Stores, Inc. (NYSE:WMT)’s absence from the Family Dollar sale thus far is baffling to Davidowitz & Associates chairman and founder Howard Davidowitz, who, along with Bloomberg’s Jeffrey McCracken, discussed the issue on Bloomberg’s ‘Market Movers’ today.
“[…] It’s even crazier that Wal-Mart is not buying this company. Wal-Mart has been screwing around with small stores for 20 years, they’re at ground level zero, everybody wants convenience, Wal-Mart once again asleep at the switch. I don’t understand that […],” Davidowitz exclaimed.
If there’s one thing seemingly at odds with Wal-Mart Stores, Inc. (NYSE:WMT) making a play for Family Dollar, it’s their own history of doing very little in the way of domestic acquisitions. Instead, they have focused the broad majority of their acquisitions on overseas expansion. However, if Wal-Mart Stores, Inc. (NYSE:WMT) is to break out of that mould, now would be the time McCracken believes.
“This has been the season, if you will, where you’ve seen cautious and conservative companies decide, ‘you know what, we’re going to spend money in a way that we haven’t in the past’, and again, I wouldn’t be surprised if they bid, and this is a big if, if they bid, it wouldn’t be surprising if you saw investor support, and you saw Wal-Mart shares move on it; you know, move upwards,” McCracken said.
The timing for a potential shift in domestic culture appears possible, given the recent handover of Wal-Mart Stores, Inc. (NYSE:WMT)’s U.S operations to new CEO Greg Foran. It may also be somewhat of a necessity even, given that Wal-Mart is being outperformed by Dollar General in revenue growth, same-store sales, and other metrics. The last thing they want is that chain getting even stronger and making off with an acquisition that could still be theirs.