Photo by Michael M. Santiago
Macy’s (NYSE:M) has firmly rebuffed a $21 per share takeover bid from investment companies Arkhouse Management and Brigade Capital Management.
The department store giant, Macy’s (M), faced with the unsolicited offer, received a direct warning from the private equity firms that they may bypass the company’s hierarchy and directly approach its shareholders with the $5.8 billion bid.
Expressing their determination, Arkhouse Managing Partners Gavriel Kahane and Jonathon Blackwell underlined their readiness to take all required steps, including direct engagement with stockholders, to achieve their acquisition objective. The investment firms have been in private discussions with Macy’s (M) over the potential acquisition proposal.
Arkhouse emphasized the possibility of enhancing the original proposal significantly if granted access to due diligence and has even offered to sign a mutual non-disclosure pact to facilitate this process.
Responding to the offer on Sunday, Macy’s (M) stated that it had assessed the non-binding proposal and concluded that it did not provide a basis for entering into a non-disclosure agreement or furnishing any due diligence information to Arkhouse and Brigade.
In its official statement, Macy’s spurned the proposal, with its Chairman and CEO, Jeff Gennette, declaring it non-actionable and lacking in compelling value for the company’s shareholders.
In a letter to Arkhouse and Brigade, Macy’s (M) board expressed “serious reservations” about the investment firms’ capability to finance the non-binding proposal.
The board went on to criticize the proposed financing plan and questioned its viability based on guidance from its advisors.
Reports emerged from the Wall Street Journal on Sunday that Arkhouse was contemplating a direct appeal to Macy’s shareholders. Earlier last week, the WSJ revealed Macy’s (M) intentions to trim about 13% of its corporate workforce, affecting approximately 2,350 roles, and to shutter five of its stores.
Adding to the intrigue, Women’s Wear Daily had previously reported that private equity firm Sycamore Partners was also eyeing Macy’s (M) as a potential acquisition target.
