Macy’s, the world-renowned department store chain, has recently turned down an unsolicited offer of $5.8 billion to go private. In response, the bidding parties, private equity firms Arkhouse and Brigade Capital, have issued a warning that they may bypass board approval and approach shareholders directly.
Despite Macy’s stock experiencing a 25% decline over the past year, it has seen a significant surge of 56% in the last three months due to speculative rumors of a potential buyout. The rejection comes after Macy’s confirmed that the offer was made on December 1st at a price of $21 per share.
The board rejected the bid, claiming that it did not provide sufficient value to the shareholders. However, Arkhouse has made it clear that they are not giving up easily and may choose to go hostile by directly appealing to the shareholders.
This offer may attract disgruntled shareholders who have grown frustrated with Macy’s ongoing efforts to adapt to the 21st-century retail landscape. Macy’s, a retail establishment that originated as a dry goods store in New York in 1858, has been struggling to keep up with fierce online competition.
Similar challenges have been faced by other prominent department stores such as JCPenney, Nordstrom, and Kohl’s, all of whom have seen their market share eroded by online giant Amazon.
To combat these difficulties, Macy’s recently announced a further reduction in its workforce by laying off approximately 2,350 employees, constituting a 3.5% decrease. The company has been engaged in extensive reorganization efforts for several years in an attempt to streamline operations and cut costs.
As part of this ongoing shift, CEO Jeff Gennette is set to step down in the coming weeks and will be succeeded by Tony Spring.
Written by Brian Swint