The Macy's Independence Day Parade

There's a lot of hot air surrounding Macy's (NYSE: M) these days, and I'm not talking about the parade of inflatable characters that will march through New York City come Thanksgiving. Shares of the retailer soared 7% on Friday as buyout chatter began making the rounds.

We live in acquisitive times, though it hasn't been all that evident in the retail space. Sure, you've seen Dollar General (NYSE: DG) and CDW (Nasdaq: CDWC) succumb to suitors' charms in recent months, but things are starting to finally heat up in upscale retail.

With Jones Apparel Group (NYSE: JNY) agreeing to sell Barneys New York over the weekend in an $825 million deal, investors who hopefully bid up shares of Macy's might be vindicated after all.

Keep in mind that Macy's isn't actively seeking a sugar daddy. In fact, it just ditched its Federated Department moniker -- and ticker symbol -- to embrace its hipper Macy's brand.

The makeover worked at first. The stock popped 7% on June 1, when it began trading under its new name and abridged trading symbol. Unfortunately, it was all downhill after that. Macy's posted sluggish comps a few days later.

If Macy's sees prolonged weakness, this might be a great time for the company to cash out. Private equity firms are lining their pockets with IPO proceeds, and the retail sector is ripe for privatization and consolidation.

Just do yourself a favor and don't go chasing after Macy's for the sole purpose of being taken out at a higher price. You've seen what some of those errant Macy's Thanksgiving Day Parade balloons can do when the wind blows the wrong way. Go for the ride, but only if you wouldn't mind owning Macy's at the end of the day.

You're a much better investor than the hot-air-headed kind.

For more on retailers and private equity, check out:

• Getting the Most from Dollar General
• BJ's Wholesale Club: Buyout Rumors Still Buzzing
• LBO Madness?

CDW is a Motley Fool Stock Advisor recommendation. To learn how the newsletter is outperforming the market, sign up today for your free 30-day trial.

Longtime Fool contributor Rick Munarriz still can't walk into a South Florida Macy's without remembering it as a former Burdine's location. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.