By  on March 24, 2005

NEW YORK — He may not have fully tipped his hand yet, but veteran players are predicting that Edward Lampert, engineer of the Sears-Kmart megamerger that is set to close today, will look to maximize shareholder value by selling assets rather than by building a viable long-term retailer.

Retail observers and analysts are betting on Lampert the investor, instead of Lampert the retailer.

Lampert, founder of ESL Investments, is the financial guru who bailed out Kmart from bankruptcy. He has publicly cited Warren Buffett as a role model, but some see him more as an asset stripper, who, unlike Buffet, is deeply involved in the management of Kmart, and will be in the merged company, as well.

“The comparison with Warren Buffett involves some pretty dramatic comparisons,” said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm. “Buffett, who has a concentrated portfolio, has a theory that no matter how many billions you have, you should only invest in a few companies. Lampert did that, and he buys undervalued firms, something that Buffett also does. They’re both what you call value investors.”

But the comparison ends there.

When the $11 billion merger was announced last November, Lampert acknowledged the challenge of the undertaking at a news conference and gave a broad outline of his vision for the combined $55 billion company.

“This is going to be an enormous undertaking,’’ he said. “We’re going to need really the best of us, but the best of both the Kmart team as well as the Sears team. I think that there is going to be a lot of work to do in converting Sears stores, where appropriate, bringing Sears products into Kmart stores….We want to make sure that everybody stays focused on running the stores and stays focused on the customers….We really want it to be very much customer-focused and store-focused.”

And Sears chief executive officer Alan Lacy, in a video shown to employee shareholders this month, urged them to vote for the merger, and said the retailer’s management is “absolutely committed and believes that Sears Holdings can be both a great company and a great retailer.”

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