Price Co. Stock Drops After Surging Amid Takeover Talk
Price Co. shares eased in over-the-counter trading Monday after takeover rumors caused a 30% rise in the shares’ value last week. The company issued a statement Monday declining comment on the reports.
Price Co. shares closed Monday at $41.50 each, down $2.25 in active trading. On Friday, Price shares rose $6.50 to close at $43.75 on volume of 3.4 million shares.
Published reports have named Wal-Mart Stores, Sears Roebuck, K mart, Costco Wholesale and Home Depot as possible suitors for Price, a San Diego-based chain of membership warehouses.
Rumors have circulated sporadically for the past six months that Price could be ripe for a takeover because much of its net worth is tied up in undervalued real estate.
Unlike most of the discount chains, Price owns most of the locations it occupies and, in some cases, the shopping centers surrounding them. Prior to last week’s run-up, some analysts said Price’s stock value did not reflect the true value of the Price real estate holdings.
A buyout could have a significant impact on the 900 employees in Price’s administrative headquarters in San Diego. The company has based all accounting, buying, management information and real estate managerial functions here.
