Macy’s has rejected a $5.8 billion takeover bid from investors Arkhouse Management and Brigade Capital Management, citing financing concerns as the primary reason.
“Following careful consideration and efforts to gather additional information from Arkhouse and Brigade, the board determined that Arkhouse and Brigade’s proposal is not actionable and that it fails to provide compelling value to Macy’s, Inc. shareholders,” stated Jeff Gennette, chairman and CEO of Macy’s, Inc.
Despite Jefferies Group, the financial advisor to the investors, issuing a highly confident letter supporting the ability to raise the necessary funds for the transaction, Macy’s emphasized that the investor group did not address the board’s concerns regarding Arkhouse and Brigade’s ability to finance their proposed transaction.
Arkhouse, holding a significant stake in Macy’s, had urged the company to respond this week without further delaying substantive discussions.
“We believe Macy’s investors support privatization given the stock’s largest single-day gain in more than two years following media reports of our interest in acquiring the company. In the absence of further updates, Macy’s shares have fallen — including after the company’s announcement last Thursday of a broad-based restructuring,” stated Arkhouse in a released statement.
As part of the restructuring process, Macy’s is reportedly laying off approximately 3.5 percent of its total headcount, translating to roughly 2,350 employees, and closing five Macy’s locations.
