Macy’s Reportedly Gets $5.8 Billion Buyout Proposal, According to Sources

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Arkhouse Management and Brigade Capital Management have reportedly made a $5.8 billion offer to acquire Macy’s Inc., according to sources familiar with the matter. The proposed deal values the retailer at $21 per share, marking a premium over Macy’s recent stock price, which closed just above $17 per share on Friday, reflecting a 17% decline since the beginning of the year.

Arkhouse, focusing primarily on real estate investment, and Brigade Capital, an asset management firm, may consider a higher bid after conducting due diligence. The potential acquirers are already offering a premium for Macy’s, a department store that has faced challenges in keeping pace with online competitors.

Despite Macy’s efforts to attract customers back to its physical stores, including the announcement of 30 new locations at strip malls in October, the retailer continues to experience declining sales, down 7% year-over-year. While Macy’s expressed optimism after beating Wall Street’s expectations in the most recent quarter, the improvement was largely attributed to sales at owned brands like Bloomingdale’s and Bluemercury, rather than the core Macy’s chain.

Macy’s has become a target for acquisition as it grapples with slumping sales and increased competition from both online retailers and brands opting to sell directly to consumers rather than through department stores. The retail landscape has seen similar trends, with Kohl’s facing a takeover bid in 2022, rejecting multiple offers it deemed undervalued.

This potential acquisition comes against the backdrop of a challenging year for retailers, dealing with volatile interest rates and high inflation, impacting consumer spending. However, the online shopping sector has shown resilience in consumer spending, with robust performance during Black Friday and Cyber Monday. The outlook for the holiday season remains uncertain, as several retailers have issued cautious fourth-quarter forecasts.