Arkhouse and Brigade Capital Have Increased Their Initial Bid to $6.58 Billion
Macy’s experienced 16 percent increase in shares following an an increased private takeover bid from investors Arkhouse Management and Brigade Capital over the weekend. This revised bid valued the US department store operator at $6.58 billion.
The investors increased their offer price to $24 per share for the remaining stake they do not own, up from the previous $21 per share. This adjustment prompted a rise in the retailer’s shares, reaching $21, despite a 10 percent loss in value the previous year.
“We remain open to increasing the purchase price further subject to the customary due diligence,” Arkhouse had said on Sunday. Macy’s, however, has not yet granted access to its financial records to the bidders, as it reviews the new offer. This cautious approach follows the rejection of a prior bid from Arkhouse in January, citing concerns regarding deal financing and valuation.
In a strategic move, the real estate-focused investing firm announced securing commitments from global lenders to finance the deal, contingent upon gaining access to Macy’s financial information.
Facing challenges in maintaining sales growth and profitability amidst stiff competition from more affordable physical and e-commerce alternatives, Macy’s unveiled a turnaround plan last week. This plan includes reducing store counts and job roles while focusing on revitalizing sales at its luxury labels Bloomingdale’s and Bluemercury through merchandise improvements and increased staffing.
Arkhouse intensified pressure by nominating nine director candidates with relevant retail, real estate, and capital markets experience to Macy’s 14-member board. With an economic exposure of 4.4 percent to Macy’s, along with its affiliates, Arkhouse seeks to influence the company’s strategic direction and decision-making process.