- Wednesday, October 16, 2024
Macy's stock experienced a significant surge on Thursday morning following reports of a potential new takeover bid. Private-equity firm Sycamore Partners has been in talks to add Macy's to its already diverse retail portfolio, which includes well-known brands such as Ann Taylor, Loft, and The Limited. While financial terms were not disclosed, the talks have been ongoing since at least late December, as reported by the New York Post.
Just days ago, Macy's rejected an unsolicited $5.8 billion bid from private-equity firms Arkhouse and Brigade Capital. The department store giant argued that the offer did not provide sufficient value for shareholders, despite the bid valuing Macy's at $21 a share, representing a 32% premium to the prevailing stock price at the time.
Both Sycamore Partners and Macy's have declined to comment on the recent report. However, just last Sunday, Macy's CEO Jeff Gennette stated in a company release that they and their board of directors are committed to evaluating different options to enhance shareholder value. Gennette expressed his concern that engaging in any further negotiations or providing additional due diligence to Arkhouse and Brigade would unnecessarily distract the management team from executing their existing business strategy and value-creation initiatives.
As the situation continues to develop, market analysts will keenly watch for any further updates regarding Macy's potential for a new takeover bid.
New Hope for Macy's as Potential Hostile Bidders Emerge
Shares of Macy's, the struggling department store giant, experienced a 3.2% rally to $18.74 in midmorning trading on Thursday. This sudden surge in stock value was fueled by the possibility of a competing bid materializing, which could ultimately lead both parties to increase their offers. TD Cowen analyst Oliver Chen recently suggested that the likelihood of an acquisition being finalized was less than 40%. However, the emergence of another interested buyer could significantly improve those odds.
For many investors, a buyout seems to be the ideal solution for Macy's. Over the past five years, the company's shares have plummeted by nearly 30% as it struggles to keep pace with its e-commerce and direct-to-consumer competitors. In a bid to reorganize its operations, Macy's recently laid off 3.5% of its workforce.
Nevertheless, Macy's is not one to back down easily. Unwanted takeover attempts are not new to the company. In the past, it has successfully defended itself against bids from activist investors Starboard Capital and Hudson's Bay, the owner of Saks Fifth Avenue.
Macy's future now hangs in the balance as Arkhouse, a potential hostile bidder, contemplates launching a campaign against the company. Arkhouse has made it clear that it is "prepared to pursue all necessary steps" to acquire Macy's, setting the stage for a fierce battle.
While uncertainties loom, investors and industry observers eagerly await further developments regarding this potential acquisition.
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