Majors

Macy’s Rejects Billion-Dollar Buyout Offer

MajorsJan 23, 2024

Macy’s Rejects Billion-Dollar Buyout Offer

The retailer said Arkhouse Management and Brigade Capital Management failed to provide evidence of a viable plan to finance the deal.

Macy’s Great Tree Chicago
The “Great Tree” inside the Walnut Room of the Macy’s State Street store in Chicago. The publicly traded department store chain, which also owns Bloomingdale’s, has rejected an offer that would have taken it private. (Photo courtesy of Macy’s Inc.)
New York—Macy’s Inc. announced Sunday that it is not interested in the $5.8 billion buyout offer floated by an investor group that would have taken the storied department store chain private.

In a statement published Sunday, the retailer acknowledged that on Dec. 1, it received an unsolicited offer from Arkhouse Management Co. LP and Brigade Capital Management LP to buy all the shares of the company they do not already own for $21 each in cash. 

That is 19 percent higher than the retailer’s closing share price on Friday, $17.63.  

Macy’s said while its board of directors and management team are “committed to driving long-term value” for the retailer and are “open-minded about the best path to achieve this objective,” it questions Arkhouse and Brigade’s ability to finance the $5.8 billion deal. 

It also noted the proposal’s “lack of compelling value.” 

In a letter sent to Arkhouse and Brigade on behalf of the retailer’s board of directors, Macy’s Chairman and CEO Jeff Gennette wrote, “The board does not see a basis to enter into a non-disclosure agreement or provide any due diligence information in response to your proposal. 

“Such an exercise would unnecessarily distract our management team as it continues to drive value for shareholders through execution of our business strategy and value creation levers.” 

 Related stories will be right here … 

Macy’s has struggled in recent years, as it has been slow to adapt to online shopping, has lost sales to online players as well as other brick-and-mortar retailers, and has been hurt by the drop in mall foot traffic.

It recently announced plans to lay off about 3.5 percent of its workforce, including 13 percent of its corporate staff, and close five stores in an attempt to cut costs, as first reported by The Wall Street Journal.

The Journal also was first to report news of the buyout offer, citing unnamed sources in a story published Dec. 10.

Macy’s ranks No. 7 on National Jeweler’s list of “$100 Million Supersellers” in the latest State of the Majors report, with an estimated $1.70 billion in watch and jewelry sales in 2022. 

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