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<p class="has-drop-cap">Shares of Macy’s (NYSE: M) climbed 2% in premarket trading Monday after the department store giant <a aria-label="rebuffed (opens in a new tab)" href="https://www.reuters.com/markets/deals/arkhouse-confirms-58-billion-proposal-take-macys-private-2024-01-22/" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">rebuffed</a> the <a href="https://tokenist.com/macys-shares-soar-after-repots-of-5-8b-buyout-offer/" rel="noopener noreferrer nofollow" class="deco-link">$5.8 billion acquisition offer</a> from Arkhouse Management and Brigade Capital. The proposal, announced last month, “lacks compelling value,” Macy’s said.</p>
<h3 id="arkhouse-willing-to-come-back-with-improved-proposal">Arkhouse Willing to Come Back With Improved Proposal</h3>
<p>Last month, Arkhouse Management and Brigade Capital investor group <a aria-label="unveiled (opens in a new tab)" href="https://www.wsj.com/business/deals/investor-group-launches-5-8-billion-buyout-bid-for-macys-441ca24a" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">unveiled</a> a $5.8 billion acquisition offer for Macy’s, proposing a price of $21 per share—a premium exceeding 20% based on the retailer’s share price.</p>
<p>On Sunday, Macy’s rejected the offer, deeming it financially unattractive and lacking credibility for granting access.</p>
<blockquote class="wp-block-quote">
 <p>“The board has determined not to enter into a non-disclosure agreement or provide any due diligence information to Arkhouse and Brigade.”</p> <cite>– Macy’s said in a statement. </cite>
</blockquote>
<p>Macy’s CEO, Jeff Gennette, said Arkhouse’s proposal is “not actionable” and “lacks compelling value” for shareholders. Gennette emphasized the company’s openness to opportunities aligned with its best interests and shareholders.</p>
<p>Arkhouse affirmed its stance in response, expressing a willingness to significantly improve the original proposal if granted access to the requisite due diligence. The investor also noted that Macy’s shares experienced a 17% surge following the proposal disclosure in December.</p>
<p>Arkhouse believes that the largest single-day gain in the stock in over two years reflected investor backing for privatization.</p>
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<h3 id="macy-s-real-estate-holdings-valued-between-7-5b-to-11-6b">Macy’s Real Estate Holdings Valued Between $7.5B to $11.6B</h3>
<p>Arkhouse’s acquisition offer for Macy’s comes after a challenging period for the company and the broader traditional department store sector.</p>
<p>Macy’s has faced challenges competing with younger online rivals and peers with smaller physical store footprints. This situation has allowed Arkhouse, a real-estate-focused investment firm, and Brigade, a hedge fund, to pressure Macy’s to consider a sale.</p>
<p>However, according to Reuters, Macy’s is currently not engaged in a sale process with other parties, and there haven’t been any unsolicited bidders meeting the company’s expectations for a potential deal. Sources indicate that Macy’s seeks a bidder with committed financing and a successful track record in retail buyouts.</p>
<p>Arkhouse and Brigade Capital’s $5.8 billion has drawn attention to the perceived undervaluation of Macy’s concerning its <a href="https://www.nytimes.com/2017/11/22/business/macys-retail-real-estate.html" target="_blank" aria-label="real estate holdings (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">real estate holdings</a>, with analysts estimating their value to be in the range of $7.5 billion to $11.6 billion. Interestingly, Macy’s total market capitalization sits at $4.83 billion.</p>
<p>As of the end of January, Macy’s owned 316 out of its total 722 stores, as outlined in its most recent annual report.</p>
<p>Meanwhile, the company announced last week that it is <a aria-label="cutting 2,350 jobs (opens in a new tab)" href="https://www.reuters.com/business/retail-consumer/macys-slash-2350-jobs-close-stores-streamlining-effort-2024-01-18/" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">cutting 2,350 jobs</a> and closing five stores to streamline operations.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em><strong>Do you think Arkhouse and Brigade Capital will return with a significantly improved offer following Macy’s rebuff? Let us know in the comments below.</strong></em></p>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/macys-rejects-5-8b-buyout-offer-likely-targeting-its-real-estate-assets/">Macy’s Rejects $5.8B Buyout Offer Likely Targeting its Real Estate Assets</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Macy’s Rejects $5.8B Buyout Offer Likely Targeting its Real Estate Assets

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