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Macy’s Rejects Takeover Bid

consumer discretionary news Jan 25, 2024

The ailing retailer wants to find their own road to recovery



After pressure pushed Macy’s lower to end the week—the retail institution popped this morning after management rejected a bid by Arkhouse management to take them private. Let’s break it down: 



Arkhouse Management and Brigade Capital Management partnered up to offer Macy’s a $5.8 billion buyout that would get the retailer off public markets. While Macy’s initially rose when that offer was made public—bull sentiment has soured since. The pullback was justified yesterday when Macy’s management rejected the deal. Leadership at Macy’s claimed that Arkhouse and Brigade didn’t have good enough financing to pull off the deal and publically rebuked it. 



Arkhouse and Brigade already own a significant portion of Macy’s stock—and the core of their thesis is that Macy’s is heavily undervalued due to their underlying real estate. The takeover team estimates Macy’s is sitting on real estate worth anywhere from $7.5 to $11 billion. 


Macy’s still finds their core business valuable as well and wants to chart their own way to bringing their valuation back. Their layoff wave last week was a great start—but the market wants to see even more from the company. 



Investors love to see this news as it signals management has enough confidence they can push past a $5.8 billion valuation on their own relatively quickly. Macy’s has a lot to clean up before they can fully recover their valuation—but their current efforts to streamline are a great start. This is also management signaling they’re a little more bullish about the consumer spending outlook in general, which is another great sign for our recovery. Investors responded by pushing Macy’s stock up over 2%, more than recovering the shortfall Macy’s suffered to end trading last week.