Macy's declines $5.8 million takeover bid news photo the Impression

Macy’s Declines $5.8 Billion Takeover Bid

Financing Concerns Prevented the Company from Accepting the Offer from Investors Arkhouse Management

Macy’s has rejected a $5.8 billion takeover bid from investors Arkhouse Management and its partner Brigade Capital Management, pointing to concerns over financing.

“Following careful consideration and efforts to gather additional information from Arkhouse and Brigade, the board determined that Arkhouse and Brigade’s proposal is not actionable and that it fails to provide compelling value to Macy’s, Inc. shareholders,” said Jeff Gennette, chairman and CEO of Macy’s, Inc.

Despite a highly confident letter from Jefferies Group, the financial advisor to the investors, assuring the ability to secure the required funds, Macy’s further cited that the investor group did not sufficiently address the board’s concerns regarding their financing capabilities for the proposed transaction.

Arkhouse, which owns a significant stake in Macy’s, had asked the company to respond this week without further delaying substantive discussions.

“We believe Macy’s investors support a privatisation given the stock’s largest single-day gain in more than two years following media reports of our interest in acquiring the company. In the absence of further updates, Macy’s shares have fallen — including after the company’s announcement last Thursday of a broad-based restructuring,” Arkhouse said in a statement.

As a part of its restructuring process, Macy’s is said to be laying off about 3.5 percent of its total workforce, which amounts to roughly 2,350 employees, as well as closing five Macy’s locations.