An investor group has made a $5.8 billion bid for Macy’s Inc. (M), and if negotiations do not progress, they are considering making a direct appeal to shareholders. Arkhouse Management and Brigade Capital Management proposed on December 1 to purchase all outstanding Macy’s common stock they do not currently own at $21 per share.
Despite an initial increase in stock value following the bid, Macy’s stock has since declined, closing at $17.63 on Friday, giving the company a market capitalization of $4.8 billion.
The investor group, which holds a substantial position through Arkhouse-managed funds, has engaged in private talks with Macy’s regarding their proposal. However, in the absence of a pending agreement, Arkhouse is prepared to directly involve shareholders, which could potentially lead to a board seat battle or a hostile takeover attempt.
Arkhouse has suggested that it could significantly increase its initial proposal if given the opportunity to proceed with due diligence. The group has proposed signing a mutual non-disclosure agreement to provide more details about its financing and strategy, and has requested a response from Macy’s this week.
“We are highly motivated to consummate an acquisition of Macy’s and are prepared to pursue all necessary steps, including direct engagement with stockholders, to achieve this goal,” said Arkhouse Managing Partners Gavriel Kahane and Jonathon Blackwell.
Macy’s, which also owns Bloomingdale’s and Bluemercury, has not yet publicly responded to the investor group’s proposal. More information about the company’s new strategy under incoming Chief Executive Tony Spring is expected to be provided in the coming weeks.
The stock closed at $17.63, significantly lower than the proposed $21 per share acquisition price.
It remains to be seen how this potential acquisition bid will unfold, but it is clear that the investor group is determined to pursue this opportunity. Shareholders and industry observers will be closely watching for any updates or developments in the coming weeks.
