Andrew Ross Sorkin and Tracy Rozhon in the NY Times report that buyout talks between Federated and May are continuing:

Analysts suggest that Federated would still benefit by the cost savings it could create by shutting down overlapping stores and eliminating back-office functions. According to Wayne Hood, an analyst at Prudential Equity Group, Federated would probably save $200 million in the first year of a deal.

A lot of underperforming or duplicative locations will have to close in order to wring $200M out of this deal — especially since Federated only has two business models (upscale Bloomingdale’s and midscale Macy’s) whereas May’s dozen nameplates operate in a far wider range of market conditions. A consolidation by the industry’s two largest players could leave dozens of malls with dark anchor spaces, and the inevitable sales declines that follow could push even the remaining anchors out — putting dozens of B-grade malls out of existence unless their owners prepare to reposition now.