Macy’s rejects takeover bid, but remains ‘open to opportunities’

Macy's rejects takeover bid, but remains 'open to opportunities'

Retailer Macy’s Rejected $5.8 billion takeover bid The struggling department store chain was valued late on Sunday at about 20 per cent higher than its share price at Friday’s close, but suggested it was “open to opportunities”.

The bidders, Archhouse Management and Brigade Capital, are looking to acquire Macy’s stock, which they don’t already own, for $21 a share. Threatened to take the proposal to shareholders,

With a potentially hostile bid, questions are being raised about how Archhouse and Brigade could strike a deal and whether additional suitors might emerge, potentially triggering a bidding war.

In a statement released Sunday night, Macy’s board questioned whether the investment firms had the money to finance the deal, saying it “lacks attractive value.” It said the bid was accompanied by a letter containing “several” unconventional conditions.

Macy’s also questioned the financial feasibility of the deal. It said that the companies have proposed to pay 25 percent of the offer in equity. The remaining funds will likely come from debt such as leveraged loans, but high interest rates have reduced the appetite for such deals.

Unsolicited speech may attract others. archhouse’s 2021 Proposal Columbia Property Trust headed for developer Another buyer is entering the picture And bought Colombia in a deal worth $3.9 billion.

People familiar with the matter said Macy’s has not reached out to potential buyers. But the retailer’s chairman and chief executive, Jeff Gennett, said in a statement, “We are open to opportunities that are in the best interests of the company and all of our shareholders.”

Still, given the challenges facing the retail sector amid stubborn inflation and changes in consumer spending, the list of potential contenders is short. The damaging effect of accumulating debt on a retailer in leveraged buyouts such as Payless, Toys “R” Us and Sears has deterred many private equity firms from doing such deals. Still, some people may be interested, especially if they’re attracted to Macy’s valuable real estate portfolio.

Macy’s is under pressure to improve its business as consumers spend less on discretionary items. Its shares have fallen nearly 30 percent over the past five years, as the company has lost significant market share and been forced to close stores and lay off employees. Last week it announced it would cut 2,350 jobs.

Macy’s shares were up 3.4 percent Monday morning.

As the company tries to turn its fortunes around, all eyes are on Tony Spring, who will take over as chief executive next month after leading Macy’s healthier, higher-end brand Bloomingdale’s. But replicating that success could be challenging: Macy’s shoppers are different from Bloomingdale’s customers, and its store base is larger and underperforming.

Jordan Holman Contributed to the reporting.

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