Investor Group Offers $5.8 Billion Buyout of Venerable Retailer Macy’s

by Hayden Spiess

New York City — An investor group comprising Arkhouse Management and Brigade Capital Management has made a bid to buy out Macy’s (NYSE: M) for $5.8 billion, according to The Wall Street Journal. The offer from two of the retailer’s largest shareholders would include taking the company private. Real estate investment firm Arkhouse and global asset manager Brigade submitted the acquisition proposal Dec. 1, according to the publication. Macy’s boasts a total real estate portfolio value of $8.5 billion, according to J.P. Morgan analysts cited by Reuters

Equating to $21 per share, the offer follows six quarters of net sales declines, reports Reuters. Shares are down roughly 15.8 percent this year and closed at $17.39 Friday, but saw a surge Monday following the news, trading at $20.13.

Adjusted net income in the third quarter of this year was reported as $59 million by the retailer, including all Bloomingdale’s stores, marking a year-over-year decline of $84 million. Net sales for the quarter totaled $5 billion, down 7 percent from the third quarter of 2022, with comparable decreases to both digital and brick-and-mortar sales.

Recently, the Macy’s retail strategy has included partnerships with Toys“R”Us, as well as a focus on the introduction of small-format stores. In October, the chain announced plans to open up to 30 new smaller stores beginning in 2024, in addition to the existing 15 small-format Macy’s and Bloomie’s locations.

Arkhouse and Brigade currently hold a “big stake” in Macy’s through Arkhouse-managed funds, according to Reuters, which also reports that the investor group has discussed the bid with the retailer. Multiple publications also assert that the investor group is potentially willing to raise its bid, and The Wall Street Journal reports that an investment bank has endorsed the group’s ability to obtain the necessary financing in the form of a letter. 

— Hayden Spiess

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