In my mind the factor most likely to produce increased earnings in the merged company is cost savings, not reduced depreciation expenses. As longtime points out, there will be ongoing capital expenditures at the EBSC stores even if EBSC's long term assets are written down to zero.
The real savings will come from the fact that in the new company you will need one team of merchandise buyers, not two, with an appropriate reduction in headcount. Same with real estate management, personnel, advertising and marketing, credit card operations, etc.
Retailing is a tough business with very low margins these days. BONT has been earning about 1.9% of sales and EBSC an even lower 0.2% of sales. The flip side of the low margins is that doesn't take much of an improvement on the cost side to have an enormous impact on net income. So if BONT is able to cut some costs, and throw in some improved sales as a result of the improving economy, and profits could soar.
Regarding longtime's stock offering to finance store renovations - I'd rather them go slow and pay for it out of operating cash flow. Less dilution for the existing stockholders.