Macy's rebuffs proposed $5.8 billion buyout bid
Unsolicited Takeover Bid by Arkhouse and Brigade Rejected by Macy's
Macy's has declined an offer from financial firms, Arkhouse Management, and Brigade Capital Management, made in December, to take the retail giant private.
In a firm statement, Macy's confirmed that it had received the takeover offer but, after careful review, its board deemed it unsuitable for a non-disclosure agreement or due diligence information exchange with Arkhouse and Brigade. The proposed price was $21 per share, amounting to around $5.76 billion based on Macy's outstanding shares.
Gavriel Kahane and Jonathon Blackwell of Arkhouse Managing Partners expressed their confidence in Macy's future success as a private company. However, their offer may have been seen as holding out for a better deal, according to GlobalData Managing Director, Neil Saunders. The Arkhouse executives left the door open for increasing the offer "if granted access to the necessary due diligence."
Macy's CEO, Jeff Gennette, expressed reservations about the financial structure of the deal, suggesting that the required debt was unachievable in the current market. He also criticized the finance setup and secretive communication methods of the bidders, with concerns about preconditions and a lack of transparency.
Despite the rejection, the takeover bid poses challenges for Macy's shareholders and incoming CEO, Tony Spring. The premium price and the retailer's current financial struggles present an attractive opportunity for some investors, but exercises caution may be advisable, given Macy's refusal to engage further with Arkhouse and Brigade.
Macy's struggles in the retail sector, highlighted by store closures and sales declines, may have influenced its decision. Nevertheless, the focus of Arkhouse on unlocking value in real assets might indicate a viable strategy, although it could potentially weaken Macy's long-term prospects, as Neil Saunders suggested.
Macy's financial advisers, Bank of America Securities, Wells Fargo, and legal advisers, Wachtell, Lipton, Rosen & Katz, are supporting the company in these critical negotiations.
In the midst of these developments, it's crucial to keep a watchful eye on Macy's and its financial future. Subscribe to our Retail Dive free daily newsletter for the latest updates in the world of retail.
[1] Numerous media outlets, including Reuters, CNBC, and The Wall Street Journal, have covered Macy's rejection of the takeover bid by Arkhouse Management and Brigade Capital Management.
[2] Retail Dive provides daily newsletters and in-depth coverage of retail trends and market analysis.
[3] The takeover bid by Arkhouse Management and Brigade Capital Management comes as part of the private equity firms' strategy to invest in brick-and-mortar retailers.
[4] Macy's is grappling with challenges in the retail sector, including store closures and sales declines.
[5] The rejection of the takeover bid by Macy's aligns with its efforts to navigate these difficulties independently rather than selling to private equity firms.
- Despite the rejection by Macy's, the takeover bid attracted attention from various business news outlets such as Reuters, CNBC, and The Wall Street Journal.
- Retail Dive offers daily newsletters and in-depth insight into the retail industry, providing valuable information on trends and market analysis.
- The unsolicited takeover bid by Arkhouse Management and Brigade Capital Management is a part of their venture into investing in traditional retail chains.
- Macy's is currently facing several challenges in the retail business, including store closures and decreasing sales.
- In line with its endeavor to face these challenges independently, Macy's decided to reject the takeover bid instead of selling to financial firms like Arkhouse Management and Brigade Capital Management.
- The AI and technology sector, along with the finance industry, is closely monitoring Macy's status in the retail business, with potential implications for jobs and future business opportunities.
- The war for control in the retail sector is heating up, as key players like Macy's maneuver to maintain their positions amidst increasing competition and market shifts.
