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NEW YORK -- Shares of Fort Worth-based RadioShack jumped Wednesday as investors speculated about a possible takeover of the electronics retailer.
The stock (ticker: RSH) rose $1.16, or 5.8 percent, to $21.03 as more than four times the typical number of shares traded hands. The stock has traded between $6.47 and $21.56 during the past year.Some news media reports suggested that an investment firm might try to take over the company in a leveraged buyout.Patrick Mortimer, director of options trading at Pipeline Trading Systems Llc. in New Hope, Pa., wrote in a report to clients that "Apollo Management and another private equity firm had expressed interested in buying the company," according to Bloomberg News.Charles Zehren, a spokesman for Apollo, declined to comment. Apollo, a publicly traded investment company, reported $2.8 billion invested in 70 companies as of Dec. 31.RadioShack said it does not comment on market rumors.Dow Jones News Service noted that RadioShack is benefiting from higher sales of wireless phones and services. The news service reported that Michael Pachter, an analyst with Wedbush Morgan Securities, said the improvement makes the company ripe for a takeover."There are definitely a lot of opportunities and growth areas which would be very attractive to a private equity firm," he said. "It could be a good deal."RadioShack's outstanding shares are valued at about $2.4 billion. It ended 2009 with a cash balance of $908 million and long-term debt of $627.8 million. Last year, the retailer's net income rose 8 percent while sales rose 1 percent to $4.28 billion.RadioShack has a long history in Fort Worth. The small chain of Boston-area electronics stores was acquired in 1963 by Tandy Corp., which changed its name to Radio Shack Corp. in 2000. The Star-Telegram reported in November that RadioShack was searching for a new headquarters and was considering moving out of Fort Worth.In 2001, the company bought the Ripley Arnold public housing complex at the north end of downtown and built a 900,000-square-foot campus after the City Council approved a 30-year economic development agreement that was aimed at keeping RadioShack in Fort Worth.But as its business declined, RadioShack sold the campus in 2005 to a German company, which in turn sold it to Tarrant County College in 2008. RadioShack can remain in two buildings of the campus until 2011 rent-free. After that, it has the option of leasing one building for two more years at market rates.The company employs about 1,700 people at its headquarters, according to the Fort Worth Chamber of Commerce.
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