Late on Sunday, an investor consortium comprising Arkhouse Management and Brigade Capital revised its proposal to acquire the department store giant Macy’s Inc (NYSE: M), following the rejection of an earlier offer.
In their updated bid, the consortium now proposes $24 in cash per share of Macy’s, a significant increase from their initial offer of $21 per share. This latest bid represents a premium of 33% over Macy’s closing price on Friday and values the retailer at approximately $6.6 billion.
Arkhouse Management stated that the group remains open to further raising the acquisition price if necessary. Macy’s responded to the revised offer in a press release on Sunday, indicating that its board would evaluate the new proposal.
This heightened offer marks the consortium’s second attempt at acquiring Macy’s, having previously made a bid in November that was rebuffed by the company. The latest development comes on the heels of Macy’s announcement of a comprehensive restructuring plan, which entails cost-cutting measures, inventory reduction, and the closure of 150 stores over the next three years.
Arkhouse Management’s managing partners, Gavriel Kahane and Jonathon Blackwell, expressed confidence in Macy’s long-term prospects if taken private, particularly following the unveiling of the restructuring plan last week. In response to the initial rejected bid, Arkhouse had nominated nine director candidates for Macy’s board, signaling a potential proxy battle.
Macy’s, a longstanding retail institution, has faced challenges in retaining customers amid shifting consumer preferences, notably the growing inclination towards online shopping over traditional retail channels. However, the company surprised investors with better-than-expected fourth-quarter earnings results released last week, demonstrating resilience amidst the evolving retail landscape.