Macy’s (NYSE:M) has turned down a $5.8 billion takeover bid from investment firms Arkhouse Management and Brigade Capital Management, citing concerns about the financing plan’s viability and a perceived lack of compelling value. The investment firms proposed $21 per share for the remaining Macy’s stock they don’t already own.
The rejection follows Macy’s recent announcement of laying off about 3.5% of its total workforce, approximately 2,350 employees, and the closure of five locations as part of ongoing efforts to navigate a challenging retail landscape.
Macy’s board reviewed the proposal from Arkhouse and Brigade and expressed reservations not only about the financing plan but also about the overall value offered. Jeff Gennette, outgoing chairman and CEO of Macy’s, stated, “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.”
The company remains open to opportunities that align with the best interests of the company and its shareholders. Tony Spring is set to take over as president and CEO of Macy’s in the coming month.
Neil Saunders, managing director of GlobalData, suggests that Macy’s management may not be inclined to pursue a deal, particularly one with a real-estate-focused approach like that of Arkhouse. While acknowledging the challenges Macy’s faces in revitalizing its retail fundamentals, Saunders warns that monetizing real estate without strengthening the core retail business could result in short-term gains but harm long-term prospects.
The rejection comes amid pressure on department stores, including Macy’s, to boost sales in a post-pandemic world. Many department stores struggled to compete with online rivals even before the pandemic, and the subsequent store shutdowns during the health crisis pushed some to the brink of bankruptcy.
Macy’s has been implementing strategic measures to enhance its sales, including the expansion of small-format stores to cater to consumers seeking more convenient locations. The company aims to add up to 30 new small-format locations by the fall of 2025, bringing the total to approximately 42.
Shares of Macy’s Inc. rose nearly 4% in response to the news, reaching $18.31 in morning trading. The rejection reflects Macy’s commitment to assessing opportunities that align with its long-term objectives and shareholder value.
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Author Faith Yakubu 
