Company News: Sears move fails to excite investors

For months, Wall Street has been waiting for hedge fund wizard Ed Lampert to reveal his plan to turn around ailing retailer Sears Holdings Corp.

Investors got their first puzzling clue to his plan Monday evening when Sears disclosed it had amassed a hefty 13.67 percent stake in Restoration Hardware Inc. and was mulling a possible acquisition of the retro-themed retailer.

The news sent the upscale home decor chain’s stock into overdrive Tuesday, but left some analysts questioning why Sears’ chairman would set his sights on a comparatively small company with few real estate assets at a time when the nation’s housing slump is causing heartaches across the retail industry.

“That’s it?” asked Morgan Stanley analyst Gregory Melich in a research note published Tuesday. “(It’s) not the transformational deal that some have been hoping for.”

Many investors seemed to agree, pushing down Sears shares on Tuesday.

Meanwhile, the stock of Corte Madera, Calif.-based Restoration Hardware, which earlier this month said it planned to sell itself to private equity firm Catterton Partners for $267 million, climbed more than 14 percent before falling slightly.

Sears spokesman Christian Brathwaite and Restoration Hardware spokeswoman Christine Greany declined to comment Tuesday.

Indian automaker Mahindra & Mahindra Ltd. is among the three final bidders for Ford Motor Co.’s Jaguar and Land Rover units, a person who has been briefed on the negotiations said Tuesday.

Mahindra, which has joined private equity firm Apollo Management LP to bid for the British automakers, is competing against another Indian automaker, Tata Motors Ltd., and U.S. private equity firm One Equity Partners LLC, said the person, who requested not to be named because the talks are private.

Burger King Corp., in a move that could ignite a fast-food discounting war, plans to test a $1 double cheeseburger that would challenge one of McDonald’s Corp.’s best-selling items.

The nation’s No. 2 hamburger chain, Burger King said it will feature a larger double cheeseburger than McDonald’s at a heavily discounted rate in three unnamed U.S. markets early next year.

Burger King restaurants typically charge well over $2 for that sandwich. At most Burger Kings, a single-patty Junior Whopper is the lone hamburger now on the Value Menu. But some Los Angeles-area Burger Kings said Tuesday they have been selling double cheeseburgers for 99 cents for several weeks.