Investor Group Boosts Macy’s Buyout Offer by Nearly $1 Billion
In a surprising turn of events, Arkhouse Management and Brigade Capital have announced that they are increasing their offer to acquire Macy’s by nearly $1 billion. The investor group is hoping to take the department-store chain private, and this new offer reflects their determination to make this deal happen.
The initial bid of $21 a share, or about $5.8 billion, was rejected by Macy’s board in January. At the time, the board claimed that the offer lacked “compelling value.” However, Arkhouse and Brigade are not backing down. They have now increased their bid to $24 a share, or about $6.6 billion, representing a 51.3% premium to Macy’s share price as of November 30, 2023, when their original proposal was submitted.
This new offer also represents a 33% premium to Macy’s stock price as of Friday, when it closed at $18.01 a share. The investor group is clearly showing its confidence in the future of Macy’s by significantly raising their offer.
Despite the rejection of their previous bid and the frustration caused by the delay tactics employed by Macy’s board, Arkhouse and Brigade remain committed to acquiring the company. In a statement, they expressed their determination to execute this transaction and emphasized their frustration with Macy’s board of directors for refusing to engage with their credible buyer group.
Macy’s, on the other hand, has acknowledged the receipt of the new offer and stated that it will carefully review and evaluate the proposal in accordance with its fiduciary duties. The company will consult with its financial and legal advisors before making any decisions.
This development comes at a time when Macy’s is implementing a restructuring plan that involves closing 150 stores, including its iconic flagship store in downtown San Francisco. Despite this move, the company announced fourth-quarter earnings that beat expectations. Arkhouse and Brigade have taken note of this and believe that if redirected as a private company, Macy’s has promising long-term prospects.
The current state of Macy’s shares reflects the challenges the company has been facing. Its stock is down about 10% year to date and has fallen 21% over the past 12 months. In contrast, the S&P 500 has experienced an 8% gain in 2024 and a 27% gain over the past year. This highlights the need for a significant change in strategy and ownership for Macy’s to regain its competitive edge.
The new offer from Arkhouse Management and Brigade Capital provides an opportunity for Macy’s to reassess its future and potentially transform as a private company. As the investor group awaits Macy’s response, the industry eagerly anticipates the outcome of this high-stakes negotiation. Will Macy’s board of directors recognize the value in this increased offer? Only time will tell.
