An investor group, led by real-estate-focused Arkhouse Management and global asset manager Brigade Capital, has reportedly unveiled a $5.8bn buyout bid for US retailer Macy’s, the Wall Street Journal (WSJ) reported.

This strategic move aims to privatise the department store chain, responding to challenges posed by fierce competition from online retailers, which has impacted its market value.

The proposal

Arkhouse and Brigade submitted a proposal to acquire Macy’s stocks they don’t already own at a price of $21 per share, the WSJ first reported.

The investor group, recognising Macy’s as undervalued in the public markets, has expressed willingness to increase its offer contingent on successful due diligence.

Negotiations and financial backing

The consortium already holds a substantial position in Macy’s through Arkhouse-managed funds.

Discussions regarding the proposal have taken place between the investor group and Macy’s, prompting the retailer’s board to convene for further deliberation.

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By GlobalData

According to the WSJ, the retailer’s stance on the offer remains uncertain and the investor group remains open to enhancing the offer.

Macy’s financial landscape and cultural significance

Macy’s, with nearly 500 department stores, including Bloomingdale’s, generated approximately $1.2bn in profit from $24.4bn in revenue last financial year.

Despite a slight decrease from 2021 figures, the company’s cultural significance endures, highlighted by annual events such as Macy’s Thanksgiving Day Parade.

The retailer has been a previous target for acquisition and activism. In 2017, Hudson’s Bay Company explored a deal, and in 2021, considerations were made to separate e-commerce operations from physical stores.

The company’s turnaround efforts, led by CEO Jeff Gennette, involved store closures, the introduction of new brands, and modernising its supply chain.