Macy’s denies Arkhouse’s $5.8 billion offer, citing funding worries.

TLDR:

Macy’s has rejected Arkhouse Management and Brigade Capital Management’s bid to acquire the department store operator for $5.8 billion, citing concerns over deal financing and valuation. Arkhouse and Brigade had proposed to acquire the shares of Macy’s they don’t already own for $21 a share. Macy’s stated that the information provided by Arkhouse and Brigade failed to address the board’s concerns about their ability to finance the transaction.

Key Points:

• Macy’s has rejected a $5.8 billion proposal from Arkhouse Management and Brigade Capital Management to take the department store operator private.
• The investor group sees potential for a higher offer if granted access to due diligence, but Macy’s has declined.
• Macy’s expressed concerns about the financing and the ability of Arkhouse and Brigade to fund the proposed transaction.
• Arkhouse and Brigade have a significant stake in Macy’s and claim to have the necessary funds for the deal.
• The bid highlights the undervaluation of Macy’s, with its real estate estimated to be worth between $7.5 billion to $11.6 billion.
• Macy’s has been struggling to compete against online retailers and announced job cuts and store closures last week.

Macy’s has rejected a $5.8 billion bid from Arkhouse Management and Brigade Capital Management to acquire the department store operator, citing concerns over deal financing and valuation. Arkhouse and Brigade had proposed to acquire the shares of Macy’s they don’t already own for $21 a share. In a statement, Macy’s said that the information provided by Arkhouse and Brigade failed to address the board’s concerns regarding the ability to finance the proposed transaction. The bid from Arkhouse and Brigade highlights how undervalued Macy’s is compared to the value of its real estate, estimated to be worth between $7.5 billion and $11.6 billion. Macy’s owns 316 of its 722 total stores, according to its most recent annual report. The company has been struggling to compete against younger, online competitors. Last week, Macy’s announced it is cutting 2,350 jobs and closing five stores as part of its efforts to streamline operations.