Macy’s has declined a $5.8 billion acquisition proposal from Arkhouse Management and Brigade Capital Management, citing the absence of a feasible financing strategy. The two investment firms offered $21 per share to acquire the remaining shares they did not possess.
Recently, Macy’s Inc. announced it would reduce its workforce by approximately 3.5%, or about 2,350 employees, and would shut down five of its stores.
The company’s board evaluated the offer and expressed concerns not only about the financing but also about the overall value of the proposal.
“After extensive review and attempts to obtain more details from Arkhouse and Brigade, the board has concluded that their proposal is not practical and does not offer sufficient value to the shareholders of Macy’s Inc.,” said Jeff Gennette, the outgoing chairman and CEO of the company. He added, “We remain receptive to opportunities that serve the best interest of the company and all its shareholders.”
Tony Spring is set to become the company’s new president and CEO next month. Neil Saunders, GlobalData’s managing director, commented via email that the firm’s management appears reluctant to agree to a deal. He observed that Macy’s management might view Arkhouse’s real-estate-centric strategy as inappropriate for the company. He argued that while monetizing real estate might yield immediate benefits, it could undermine the company’s long-term viability.
Saunders also pointed out Macy’s challenges in enhancing value, noting the company’s long-standing neglect of its stores and core retail practices.
He summarized the dilemma facing Macy’s shareholders: either support the current management’s future plans or sell to an investor whose intentions could potentially accelerate the downfall of this iconic retail brand.
The Ultimate Guide to Physical Activity for Seniors
Before Monday’s market opening, shares of New York City-based Macy’s Inc. saw an increase of nearly 2%.