HomeMarket News Sycamore Partners Considers All-Cash Bid for Macy's Amid Speculation

Sycamore Partners Considers All-Cash Bid for Macy’s Amid Speculation

Actionable Trade Ideas

always free

Strong Consumer Sales Number In April Hint At Wider Economic Growth

Photo Credit: Drew Angerer/Getty Images News

Whispers in the financial world have it that Sycamore Partners, a powerful private equity firm, is contemplating a daring move – setting its sights on retail giant Macy’s Inc. (NYSE:M) for a potential all-cash bid.

Rumors have it that Sycamore has secured a hefty amount of debt, positioning itself to make a tantalizing offer for Macy’s (M). The hearsay, which WWD first reported, has been the talk of the town lately.

Guess who declined to spill the beans on this hot goss? None other than the representatives of Macy’s (M) and Sycamore. They played it coy, giving only a knowing wink to WWD when approached about the speculation.

The earlier excitement that lifted Macy’s shares almost 20% on Monday was fueled by a WSJ report. It suggested that Arkhouse Management and Brigade Capital Management had gallantly put forward a $21-per-share, or $5.8 billion, offer for the ailing retailer. However, the mood turned sour on Tuesday, with Macy’s (M) shares plunging 8% due to a Citi downgrade, accompanied by the analysts’ skepticism regarding the likelihood of a successful $21 takeover.

β€œOthers have ventured down this road before (we’re looking at you, Starboard and Hudson’s Bay), but the real question is, how far along are the talks? M has not spilled the tea,” wrote Citi analyst Paul Lejuez in a note issued on Tuesday. β€œAdd in the current interest rate climate and the monumental challenges M is facing, and it seems quite the trouble to seal the deal,” Lejuez continued in his skeptical tone. He even expressed uncertainty over whether anything substantial would materialize.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.