NEW YORK — As speculation over a Federated-May merger trickled through the market over the past few weeks, the banter on Yahoo Finance’s online investor message board reached a frenzied pace.

Contributors — some of whom claim to be insiders or affiliated with the two department store chains — have discussed everything from the per-share price Federated Department Stores would likely pay for May Department Stores to reasons why a merger would not work to, most recently, speculation that a deal has already been sealed.

Since mid-January, the May message board has been populated with significantly more posts than the Federated board. Several recent contributors were employees of May openly seeking information about employee compensation and benefits at Federated-operated department stores.

On Feb. 1, one person on the May message board said Federated passed on a proposition from May to purchase the department store chain for $27 a share. But a different message posted that same day said: “Word has it the deal is already done, which is why things are so quiet.”

Another investor was adamant that a combination of the two companies is not a good match: “Together they look like an episode of ‘The Biggest Loser.’ Even after the synergies are taken, the product is still Big and Fat. Hardly a picture of grace and profitability.”

By Feb. 2, another May message board poster said Federated would not overpay for May, and opined that “this deal is dead.” He continued: “I think it would be smart for Federated to sit back and watch May die, then pick it apart.”

Speculation of the per-share price Federated was negotiating for May was mostly in the range of $27 to $29. One price floated was $45, a number several members scoffed at.

One poster speculated if the deal falls through, May shares, which have risen to roughly $33.50 in the last two weeks, could recede back to about $25.

Other messages, however, speculated that J.C. Penney & Co. could be interested in acquiring May or that a better deal for Federated would be to acquire the family-run department store chain Dillard’s.

Much of the early banter in mid-January, when news broke that merger talks were taking place in St. Louis where May is based, centered on the failings of former May chief executive officer Gene Kahn, who resigned on Jan. 14. Opinions varied on whether a new ceo or a new owner of May would be able to turn around the company’s operations.

This story first appeared in the February 7, 2005 issue of WWD. Subscribe Today.

On Jan. 25, one May message board contributor, who appears to be a May employee, said, “No matter what, the May management has to go. They are so stuck in the mud they can’t move. Their processes are redundant, their hierarchy is duplicative, and their systems are outdated.”

Finally, a Jan. 20 post on the Federated message board entitled “Gee Terry, this is original: Merger!” argued that Terry Lundgren, chairman, ceo and president of Federated, “had to do something” in light of the recent merger announcement of Sears, Roebuck & Co. and Kmart Holding Inc.

“Purchasing or merging with May is likely only to accelerate the eventual dissolution of Federated. It will keep the raiders at bay only for a short time,” the message board member wrote. “As Federated has no hint on how to run a retail operation in the current climate, they will merge to insolvency. Mr. Lundgren is simply doing what Federated has always done — buy stores to increase market share then lose market share by failing to specialize in the top or bottom of any market.”