Macy’s offered a $5.8 billion takeover, which could take it off the stock market

The US department store giant, which also owns Bloomingdale’s, is said to have received an offer from two existing investors.

Macy’s, the department store chain, is apparently the target of a $5.8 billion (£4.6 billion) takeover bid, which would result in one of the most well-known names in US retail disappearing from the stock market.

The Wall Street Journal first reported that two current investors, Arkhouse Management and Brigade Capital, had come together to offer $21 per share.

Because of its sponsorship of a Thanksgiving Day parade including large floats and balloons representing popular cartoon characters, Macy’s department stores are among the most visible in the United States. One of the world’s largest department stores is Macy’s flagship store on New York’s Herald Square.

Bloomingdale’s, a more costly department store brand, and Bluemercury, a beauty business, are also owned by the corporation. Despite its cultural dominance and extensive geographical reach, Macy’s has struggled to adapt to online retail, despite having 700 shops when counting those from other brands.

In 2020, the company announced the closure of 125 locations as well as the elimination of 2,000 positions at its headquarters in Cincinnati and offices in San Francisco.

However, the corporation is still successful, earning $1.2 billion in its most recent fiscal year. During the Black Friday sales period last month, some workers went on strike, claiming that Macy’s was prospering while they were not paid a living wage.

When it was supposedly made on December 1st, the offer from Arkhouse and Brigade constituted a 32% premium.

Macy’s stock has climbed dramatically in value over the previous month, from a low of less than $11 per share in mid-November to $17.39 when the markets closed on Friday evening.

After Wall Street started on Monday, the stock price jumped 16% to just beyond $20.22. Even a price of $21 a share would be lower than the $24 level in February, or the peak near $35 in 2021 when the world economy recovered from the coronavirus pandemic lockdowns.

According to the Wall Street Journal, the investor consortium feels that the public markets have undervalued Macy’s and may be willing to enhance the offer further. According to reports, an investment bank has provided a letter certifying the bidders’ ability to complete the buyout.

The bidders may be interested in Macy’s extensive real estate portfolio, which might be sold for a profit.