Department store operator J.C. Penney Co. is buying a minority stake in Martha Stewart Living Omnimedia Inc. for $38.5 million and teaming with the media and merchandising company on a store-within-a-store and joint web site.
J.C. Penney says it will buy 11 million Martha Stewart Living shares at $3.50 per share, giving it a 16.6 percent interest in the New York company.
As part of a 10-year deal, the companies will create Martha Stewart retail stores within most J.C. Penney locations starting in February 2013.
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The joint web site is also expected to launch in 2013.
Martha Stewart Living is expected to receive more than $200 million from the 10-year deal. Its stock is up 28 percent to $4 in premarket trading.
Penney is based in Plano, Texas.