The rejected suitors for Macy’s are not going away anytime soon after moving this weekend to raise their offer for the struggling department store chain home to its Macy’s namesake banner, Bloomingdales and Bluemercury.
Arkhouse Management and global asset manager Brigade Capital Management have raised their offer to acquire all the shares that they do not own for $24 a share, up from their previous offer of $21 a share, or a new total value of $6.6 billion from the earlier $5.8 billion offer.
Arkhouse said Sunday evening that the revised offer represents:
- A 51.3 percent premium to Macy’s unaffected share price on Nov. 30, 2023, the day prior to Arkhouse and Brigade submitting their original proposal on Dec. 1, 2023;
- A 33.3 percent premium to where the Company’s shares closed on March 1, 2024; and
- An increase of 14.3 percent from Arkhouse and Brigade’s previous offer of $21.00 per share that was submitted to the Company on Dec. 1, 2023.
“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,” said Arkhouse Managing Partners Gavriel Kahane and Jonathon Blackwell in a Sunday evening media statement. “Nonetheless, we are steadfast in our commitment to execute this transaction. In recent months, Macy’s has introduced two restructurings and a dividend hike. The stock price selloff following these announcements is a strong indication of shareholder concern about maintaining the status quo. We continue to offer the company an attractive alternative solution through a sale of the company at a substantial premium. This would provide Macy’s stockholders with significant value and immediate liquidity.
“While the restructuring plan Macy’s unveiled last week failed to inspire investors, the fourth quarter earnings and year-end results have given us further confidence in the long-term prospects of the company if redirected as a private company. After coordinating with our financing sources, we have increased our offer to $24.00 per share in cash. We remain open to increasing the purchase price further subject to the customary due diligence.
“The notion that the plan we are proposing is not actionable is simply not true. We have tried repeatedly to address the concerns raised by the company. We clarified the 50 percent equity contribution we laid out three months ago and disclosed our partnership with two highly regarded investors – Fortress and OneIM. With the help of our advisors, we have identified large global institutional financing sources for each debt component of the transaction with strong interest in finalizing commitments during a customary diligence process. These sources represent 100 percent of the capital required to buy the shares in Macy’s we do not already own at our proposed price of $24.00 per share in cash. We have struggled to understand what reservations the Board might have at this point and urge the company to engage with us in good faith with the goal of reaching a transaction that would unlock significant value for all stockholders.
“We sincerely hope the members of the Board are not so entrenched in their views about the future direction of the Company that they would ignore their fiduciary duties to explore a potential transaction with a credible buyer. We remain ready to proceed expeditiously with our due diligence toward a mutually agreeable transaction to acquire Macy’s at a substantial premium in cash.”
Macy’s shares closed at $18.01 on Friday, an increase of 3.27 percent for the day, but gave back 0.50 percent in after-hours trading Friday night. M shares were up more than 15 percent in pre-market trading on Monday, March 4.
Macy’s, Inc. confirmed on the evening of January 21 that the company received an unsolicited, non-binding proposal from Arkhouse Management Co. LP and Brigade Capital Management, LP to acquire all of the remaining shares not owned by the investment groups for $21 a share in cash on December 1, 2023 and that Macy’s, Inc.’s Board of Directors determined that the non-binding proposal did not constitute a basis to enter into a non-disclosure agreement or provide due diligence information to Arkhouse and Brigade.
SGB Media will continue to bring up-to-the-minute coverage of this high-stakes retail department store and real estate cat-and-mouse game with investors and bidders for the future of the Macy’s brand.
Image courtesy Macy’s Inc.
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For additional SGB Media coverage on Macy’s, including history and timelines, see below.
Macy’s, Inc. to Shutter 150 Macy’s Doors, Boost Investment and Door Count in Luxury
Macy’s Receives List of Board Nominations from Rejected Buyout Suitor
Macy’s Rejects $5.8 Billion Buyout Offer, Citing Financing Concerns
