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Investor Group Offers $5.8 Billion to Privatize Macy’s Department Store Chain

by Abigail Summerville

(Reuters) – According to a source familiar with the matter, Arkhouse Management and Brigade Capital, an investor group, has put forth a $5.8 billion proposal to take department store giant Macy’s private. This offer is a 20.76% premium from its closing at $17.39 on Friday, valuing the stock at $21 a share.

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The investor group, which already holds a significant stake in Macy’s through Arkhouse-managed funds, is confident in the undervaluation of Macy’s in the public markets. They have expressed a willingness to increase the offer, pending due diligence, and have secured a letter from an investment bank affirming their ability to secure the necessary financing for the deal.

However, Macy’s has yet to publicly respond to the offer, and it remains uncertain how the retailer views the proposed acquisition. The department store chain’s board has met to discuss the offer, but their stance on the matter is still unspecified.

On Macy’s end, the company has been experiencing a significant decline in its share value, with its market capitalization currently standing at about $4.77 billion. The potential acquisition holds the promise of reshaping the company’s future, especially in the wake of their successful performance in beating analysts’ profit estimates for the previous quarter.

It is worth noting that the investor group’s track record in executing deals of this magnitude is limited, with a previous $2.4 billion bid for real estate investment trust Columbia Property Trust having been unsuccessful. However, Pimco eventually acquired Columbia Property for $3.9 billion.

Macy’s declined to comment on the matter, and both Arkhouse and Brigade did not respond to Reuters’ request for comment. The outcome of this proposal and its potential impact on Macy’s future in the retail landscape remain to be seen.

(Reporting by Abigail Summerville in New York; Additional reporting by Juby Babu in Bengaluru; Editing by Diane Craft and Lisa Shumaker)

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