Macy’s confirmed on Sunday that it received a revised proposal from two of its major investors, Arkhouse Management Co. and Brigade Capital Management, to acquire each of the remaining shares in Macy’s they don’t already own for $24 per share — up from an earlier offer of $21 per share — for a deal value of $6.6 billion
As reported late last year, Arkhouse and Brigade were in talks to take Macy’s private and submitted a proposal to acquire the department store chain for $5.8 billion on Dec. 1. Macy’s rejected the pre-deal in January. At the time, the retailer said that its board reviewed the investment firms’ proposal and not only had concerns about the financing plan, but also felt there was a “lack of compelling value.”
Macy’s released a statement that its board will carefully review and evaluate the latest proposal “consistent with the board’s fiduciary duties and in consultation with its financial and legal advisors [and] is committed to continuing to take actions that it believes are in the best interests of the company and all Macy’s, Inc. shareholders.”
Total Retail’s Take: Retail insiders and analysts have said the time may be right for Macy’s to go private and accept this buyout bid. After all, the company has struggled to maintain its sales growth and profitability amid competition from cheaper physical and e-commerce offerings and a value-based shopping pattern due to elevated inflation and higher borrowing costs. Last week the retailer unveiled a turnaround plan that included closing a select number of stores as well as reducing headcount, while aiming to revive sales at its luxury labels Bloomingdale’s and Bluemercury by improving merchandise and adding more staff.
