Arkhouse Management and Brigade Capital Management increased their bid for Macy's to $24 per share, 14% higher than the previous offer of $21 per share, following the rejection of the initial bid.
The new offer values Macy's at $6.6 billion, representing a premium of approximately 33% over its recent stock price.
Despite expressing frustration with Macy's board and their reluctance to engage in discussions, Arkhouse remains committed to finalizing the transaction and is open to further raising the purchase price, subject to customary due diligence procedures.
A real estate-focused investment group called Arkhouse Management announced on Sunday that it and Brigade Capital Management had increased their bid for Macy's following the department store chain's rejection of their previous offer as being too low.
(Photo : by Justin Sullivan/Getty Images)A real estate-focused investment group called Arkhouse Management announced on Sunday that it and Brigade Capital Management had increased their bid for Macy's following the department store chain's rejection of their previous offer as being too low.
The companies are now willing to pay $24 per share, or around 14% more than Macy's prior offer of $21 per share, for any shares of the company that they do not already control.
The firm is valued at $6.6 billion, which is a premium of around 33% over its most recent finish on Friday of $18.01.
In a joint statement released on Sunday, Gavriel Kahane and Jonathon Blackwell, managing partners at Arkhouse, expressed their ongoing frustration with what they perceive as delay tactics from Macy's board and its persistent reluctance to participate in discussions. Despite these challenges, Kahane and Blackwell reaffirmed their commitment to finalizing the transaction.
They emphasized their efforts to address Macy's concerns and indicated their willingness to raise the purchase price further, contingent upon customary due diligence procedures.
Arkhouse reiterated their offer of a lucrative alternative solution for Macy's by proposing a sale of the company at a considerable premium. This move, they argue, would deliver substantial value to Macy's shareholders and offer immediate liquidity.
Macy's Response and Decision on Proposal Evaluation
In response, Macy's issued a separate statement asserting that their Board would thoroughly assess and consider the latest proposal.
Previously, the investment firms had presented a proposal in December to purchase the remaining shares of Macy's for $21 per share. However, Macy's declined the offer citing apprehensions regarding the financing and valuation of the deal.
Similar to other established department store owners, Macy's has found it difficult to compete with colleagues that have smaller brick-and-mortar footprints or with younger, online rivals. Arkhouse and Brigade now have a chance to persuade Macy's to consider a sale.
Arkhouse Management has proposed nine executives with experience in retail, real estate, and capital markets as directors to the department store's 14-member board last month, posing a challenge to Macy's leadership as well.
After reporting a fourth-quarter deficit and decreasing sales, Macy's said on Tuesday that it will eliminate 150 of its namesake locations over the following three years, including 50 by year's end. The department store company announced it will modernize its 350 remaining locations as part of its reorganization efforts.
