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What's up with SKS? Potential bidding war?

As we all know, there has been take out rumor around Saks (SKS) for a while now and according to the news, the new bidder has come into the picture. The new bidder is none other than real estate titan Barry Sternlicht. We are not sure how much the bid was for but the rumor said $17-$18 per share, in line with an offer from Hudson's Bay, owner of Lord & Taylor. On Friday, Saks jumped 8.2% with joy on the news but open today in the red with 4.47% down. 

In the above graph, we can see SKS stock price in May. During that time, Saks share has jumped sharply following the speculation about possible merger and acquisition moves. Its direct competitor, Neiman Marcus, which is also owned by Private Equity firm, is looking for an IPO as exit strategy now.

Not all analysts are positive on the company's long term outlook and said that the bidding war will only likely to help in short term gain. However, I believe that if the company can buy SKS with the bid price, it will allow the buyer to utilize Saks' unqiue market position and capitlize on omni channel selling. However, looking at company's structure, Saks still have low operating margin compare to competitors and that could be a long battle to fight and not so easy to correct.