We’re pretty sure we aren’t the driving force behind Eddie Lampert’s business decisions, but we thought it worth pointing out that what we suggested purely as speculation - that Sears Holdings may be inclined to pursue acquisitions including, dare we say, a wholesale club - now appear to be materializing into something still less than fact but perhaps more than mere speculation.

Sears’ earnings report included an unusually long section discussing possible uses for its cash pile, which includes $3.2 billion in domestic cash and $500 million from Sears Canada Ltd. (Toronto:SCC.TO - news). The retailer also repeated that Lampert had authority to invest excess cash.

Investors have long expected Lampert to use his hedge fund expertise — and Sears’s cash — to orchestrate big takeovers, but the only major deal so far has been a bid to buy the remaining stake in Sears Canada. That deal is tied up in a court battle with dissident shareholders.

“I think it’s a sign that there is something on the horizon,” said Kim Picciola, a retail analyst with Morningstar. “The fact that they are reiterating his authority to invest the surplus cash makes me think that there is more news to come.”

We’ll be waiting patiently for our finder’s fee.

When we saw this article on Watch List company BJ’s Wholesale (BJ) and the possibility of it being acquired, it got us to thinking. Specifically, it got us thinking about whether there might be a fit with Eddie Lampert’s Sears Holdings (SHLD).

For one, BJ’s stock is cheap and getting cheaper, trading at around five times its cash flow. That’s especially compelling to private equity firms routinely shelling out more than eight times cash flow for retail assets — and taking some heat lately for overpaying.

BJ’s has virtually no debt and owns about 40 percent of its real estate, both seen as positives to potential buyers.

“BJ’s is concentrated in the Northeast in good markets,” said an investment banker who did not want to be named. “There is $800 million to $900 million in real estate value in this company alone.”

It sends us back to the days when pundits were speculating that Lampert’s buyouts of Sears and K-Mart were all about the real estate. Boy were those pundits fooled when Eddie turned out to have an affinity for merchandising. Still, he may just be playing his cards close to his vest while waiting to put the last piece into the puzzle. More »