FILE – Pedestrians walk past an entrance to Macy’s flagship store along 34th Street in New York. (AP Photo/Bebeto Matthews)
Two hedge funds attempting to take over Macy’s upped their offer to $6.6 billion on Sunday after being rejected two months ago.
Arkhouse Management and Brigade Capital Management first attempted to buy Macy’s for $5.8 billion in mid-December, but the department store giant turned them down in January.
Then-Macy’s CEO Jeff Gennette said the deal failed “to provide compelling value to Macy’s Inc. shareholders.”
So the investment groups increased their offer. The $6.6 billion proposal values Macy’s stock at $24 per share. The company closed Friday trading below $18 per share, but the price quickly jumped over $20 when the markets opened Monday morning.
“We remain frustrated by the delay tactics adopted by Macy’s Board of Directors and its continued refusal to engage with our credible buyer group,” Arkhouse managing partners Gavriel Kahane and Jonathon Blackwell said in a statement. “Nonetheless, we are steadfast in our commitment to execute this transaction.”
The two firms are reportedly interested in the vast real estate portfolio of Macy’s, which they believe is undervalued. The company’s iconic Herald Square location alone is worth an estimated $3 billion.
Macy’s has made significant cuts even during the bidding process. Days before turning down the offer in January, the company announced 2,300 layoffs and five store closures.
Last week, Macy’s announced it would shutter 150 more brick-and-mortar locations within the next two years. When the plan is completed, there will only be 350 Macy’s locations still standing.
Arkhouse already owns a significant portion of Macy’s stock and last month nominated nine people to join the company’s board of directors.
The Macy’s board of directors said Monday it was reviewing the latest takeover proposal, which it called “unsolicited.” Company leaders said they wouldn’t comment further until they were done looking into the offer.
Macy’s stock traded at $70 in 2015, but the chain has struggled in recent years to keep up with online retailers. In 2017, Hudson’s Bay Company, which owns Saks, approached Macy’s about a possible takeover but never submitted a public bid.
With News Wire Services
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