Retailer superpower Wal-Mart Stores, Inc. ( WMT
Wal-Mart Executive Vice President Andy Bond said in a statement that "South Africa possesses attractive market dynamics, favorable demographic trends and a growing economy."
The proposed deal is worth 148 rands (US$21.11) per share for Massmart, whose shares jumped 10.6% on news of the offer to 149.01 rands ($21.29). That price movement indicates shareholders are expecting a higher offer, which could come from either Wal-Mart or possibly another bidder.
Meanwhile, Massmart said the two companies have entered into an exclusive negotiation period to discuss terms and conditions of a potential deal.
Wal-Mart shares were mostly flat in premarket trading Monday.
The Bottom Line
We had removed shares of WMT from our recommended list back on May 14, when the stock was trading at $52.40. The company has a 2.24% dividend yield, based on Friday's closing stock price of $54.08. The stock has technical support in the $50-$52 price area. If the shares can firm up, we see overhead resistance around the $56-$58 price levels. We would remain on the sidelines for now.
Wal-Mart Stores, Inc. ( WMT ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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