Macy’s, the iconic 165-year-old retailer, turns down a $5.8 billion unsolicited takeover offer, deeming it lacking in compelling value. The rejection comes after Arkhouse Management and Brigade Capital Management proposed to acquire the remaining Macy’s shares at a 32% premium.
In a statement released late Sunday, Macy’s disclosed its decision, emphasizing that the board of directors and management have opted not to enter into a non-disclosure agreement or provide due diligence information to Arkhouse and Brigade. Macy’s CEO Jeff Gennette asserted that the proposal is deemed “not actionable” and falls short of delivering compelling value to shareholders.
Arkhouse, undeterred by the rejection, responded, expressing the potential for a “meaningful increase” to their original proposal if granted access to necessary due diligence. The firm highlighted Macy’s shares surging 17% following the proposal’s revelation in December, indicating investor support for privatization.
Macy’s shares experienced a 12% decline over the past month but showed a 2% rebound in premarket trading. Last week, the retailer announced a 3.5% reduction in its workforce, approximately 2,350 employees, and the closure of five stores as part of ongoing efforts to streamline its business amid the online-shopping era.
Established in 1858, Macy’s currently operates about 500 Macy’s branded stores and 55 Bloomingdale’s locations. Despite various strategies, including new brands and smaller stores, Macy’s has struggled to reverse its long-term trajectory. The stock has plummeted by 75% from its 2015 peak of $73 per share, leading to the closure of nearly 300 stores, approximately one-third of its total. Macy’s remains open to opportunities in the best interests of the company and shareholders.
