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J.C. Penney Announces Joint Venture with Martha Stewart Living; Buys 16.6% Stake (JCP, MSO)

Department store operator J.C. Penney Company, Inc. ( JCP ) and media/merchandising company Martha Stewart Living Omnimedia, Inc. ( MSO ) on Wednesday announced a strategic alliance to develop a join venture featuring branded products and advice.

In pursuant to the agreement, JCP will purchase 11 million newly-created shares of MSO stock for $38.5 million, representing a 16.6% stake in Martha Stewart Living Omnimedia.

Under the 10-year commercial deal, the companies will create a new e-commerce site, which is expected to launch in 2013. Martha Stewart merchandise will also be available in J.C. Penney retail stores, and JCP is expected to pay MSO over $200 million during the initial 10-year contract period.

J.C. Penney shares were mostly flat in premarket trading Wednesday.

The Bottom Line

Shares of J.C. Penney ( JCP ) have a 2.40% dividend yield, based on last night's closing stock price of $33.30. The stock has technical support in the $29-$30 price area. If the shares can firm up, we see overhead resistance around the $36 price level.

J.C. Penney Company, Inc. ( JCP ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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