Macy’s board of directors on Sunday rejected a $5.8 billion bid to take the company private because the proposal “lacks compelling value.”
Arkhouse Management Co. LP and partner Brigade Capital Management LP, which already has a significant stake in Macy’s through Arkhouse-managed funds, issued an unsolicited proposal in December to acquire all the outstanding shares of the 165-year-old department store chain for $21 per share in cash.
Macy’s said its board “conducted a careful review of the proposal” with independent legal, financial and real estate advisors and ultimately determined that the offer “failed to provide evidence of a viable financing plan.”
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“In light of the Board’s concerns, as well as the lack of compelling value in their non-binding proposal, the Board has determined not to enter into a non-disclosure agreement or provide any due diligence information to Arkhouse and Brigade,” Macy’s said in a statement.
Macy’s CEO Jeff Gennette said that the company is still “open to opportunities that are in the best interest of the company and all of our shareholders.”
Arkhouse said in an earlier statement that the real estate investment firm and Brigade engaged privately with Macy’s regarding a potential acquisition in recent weeks. To push the deal through, it even offered to potentially give “a meaningful increase to our original proposal if we are granted access to the necessary due diligence.”
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Shortly before the proposed offer was turned down, Macy’s had announced that it was planning to close five storefronts and cut about 2,000 employees.
As of October 2023, the company operated 500 department stores under the Macy’s banner.
It also operates over 50 Bloomingdale locations, a higher-end department store, and 158 Bluemercury shops, a beauty and skin care-focused store.
During the 2022 fiscal year, the company reported revenue of $24.4 billion, down 0.1% compared with the year prior.
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