The Investor Group has increased its offer in its attempt to buy Macy’s and take the company private. The group, whose previous offers were deemed insufficient, submitted a new offer.
Arkhouse Management and Brigade Capital Management group announced on Sunday that they have increased their offer to buy Macy’s for $24 per share in cash, for a total of about $6.6 billion. Their initial offer in December was $21 per share for a total of about $5.8 billion. Macy’s board of directors rejected the offer in January on the grounds that it was “not sufficiently attractive”.
Arkhouse and Brigade said their new offer represents a 51.3% premium to the Macy’s stock price on November 30, 2023, the day before their initial offer was submitted, and a 33% premium to the stock price, which closed at $18.01 on Friday.
In the statement, Arkhouse managing partners Gavriel Kahane and Jonathon Blackwell said, “We are disappointed by the Macy’s board’s delaying tactics and continued refusal to cooperate with our trusted buyer group. However, our determination to complete this transaction is unwavering.”
In a brief statement, Macy’s confirmed that it had received the revised proposal and said it would “carefully review and evaluate the latest proposal in consultation with the board’s fiduciary responsibilities and its financial and legal advisors.”
The new offer from Arkhouse and Brigade follows a new strategy announced by Macy’s under its new CEO Tony Spring. This strategy includes the closure of 150 stores and a focus on a smaller store format. The company also plans to open around 15 Bloomingdale’s stores and at least 30 Bluemercury stores over the next three years. The retailer also reported better-than-expected fourth quarter earnings.
“Although the restructuring plan announced by Macy’s last week did not excite investors, fourth-quarter earnings and year-end results have increased our confidence in the company’s long-term prospects should it go public,” Kahane and Blackwell said in a statement on Sunday.
Arkhouse and Brigade disclosed additional information about the financing in a statement on Sunday, naming Fortress Investment Group LLC and One Investment Management US as equity capital partners for the offer. Macy’s had expressed skepticism about its financing when it rejected the offer in January.
Kahane and Blackwell said, “The notion that the plan we have presented is not viable is simply not true. With the assistance of our advisors, we have identified major global institutional financing sources that have shown strong interest in each debt component of the transaction, and we are eager to complete the commitments during a normal review process,” Kahane and Blackwell concluded.
