Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:
Dick's/Golf Galaxy [Business Week]
Summary: Dick's Sporting Goods Inc. announced that it will purchase Golf Galaxy, a specialty retail store that sells golf equipment and apparel, for $18.82 per share, or $225 million. Based in Eden Prairie Minnesota, Golf Galaxy has 61 stores nationwide and was valued at a 20.3% premium to its closing stock price on Monday. Some analysts questioned the need for such an acquisition, since Dick's Sporting Goods seems strong enough to grow its own business; the nation's largest sporting equipment retailer reported an impressive third quarter net income rise of 14 cents per share which squarely beat forecasts of 3 to 4 cents a share and an 8.8% increase in same store sales due to the popularity of Under Armour, Nike and Adidas brands. DKS CEO Edward Stack, commenting on the acquisition, called Golf Galaxy a "rapidly growing, profitable company which we believe is the best in the specialty golf category."
Related links: Media coverage: Motley Fool • NewRatings.com. Commentary: Cramer regrets recommending DKS .
Potentially impacted stocks and ETFs: Dick's Sporting Goods, Inc. (NYSE:DKS), Golf Galaxy, Inc. (GGXY) • Competitors: Foot Locker (NYSE:FL), Wal-Mart (NYSE:WMT)
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