Goldman Sachs (GS) Sees (OMX), (ANF), (AEO), (RSH), (ANN), (GPS), (SWY) in LBO Deals

The retail sector could be about to explode in LBO deals, according to Goldman Sachs (NYSE:GS), which sees the probability of LBO's for Safeway (NYSE:SWY), The Children's Place Retail Stores (NASDAQ:PLCE), OfficeMax (NYSE:OMX), Ross Stores (Nasdaq:ROST), Abercrombie & Fitch (NYSE:ANF), American Eagle Outfitters, (NYSE:AEO), Aeropostale (NYSE:ARO), RadioShack (NYSE:RSH), AnnTaylor Stores (NYSE), Dollar Tree (DLTR) and Gap (NYSE:GPS).

American Eagle Outfitters (NYSE:AEO) got a nice bump up on Wednesday on LBO rumors, so we'll probably start to see a lot of trading in the sector as rumors escalate, with a number of them probably being true, as pointed out by Goldman.

These are just some of the probabilities in the retail sector, which could consolidate even more.

Goldman determines that about $9 billion could be spent on U.S. retail LBOs. Of a universe of over 120 public companies, that equates to close to 8 percent of the overall aggregate enterprise value. That's how they came up with the 11 companies listed above, as far as the number of companies which are likely to be part of an LBO.

Goldman sees a 15 percent to 30 percent chance of a leveraged buy out for the companies listed above.