Macy’s, a department store chain in the US, is the subject of an offer of $5.8bn. (£4.6bn). This would mean that one of the most recognizable names in US retail would disappear from the stock exchange.
The Wall Street Journal reported that two existing investors, Arkhouse Management, and Brigade Capital, had banded together for a $21 per share offer.
Macy’s department store is one of the most prominent in the US. It sponsors a Thanksgiving Day Parade that has been running since 1924. The parade features giant floats, balloons with cartoon characters and other popular items. Macy’s flagship store in New York Herald Square is the largest department store in the world.
It also owns Bloomingdale’s – a department store with a higher price tag – and Bluemercury, a beauty chain. Macy’s, despite its wide geographical reach and cultural importance, has had a difficult time adapting to online retail. It currently operates 700 stores, including those of other brands.
In 2020 the chain announced that it would close 125 stores and cut 2,000 jobs from its headquarters in Cincinnati, as well as offices in San Francisco.
However, the company is still profitable, making $1.2bn in its last financial year. Some workers went on Last month, Black Friday was a time of great sales. Macy’s profits while employees are not paid a living wage.
Arkhouse and Brigade offered a premium of 32% when they reportedly made the offer on 1 December.
Macy’s stock has risen significantly in value over the past month. It went from a low of $11 per share at the beginning of November to $17.39 on Friday night when the stock market closed.
After Wall Street opened on Monday, the share price rose by 16% to just over $20.22. Even a $21 bid per share would be less than the $24 price in February or the $35 peak in 2021, as the global economy recovers from the coronavirus lockdowns.
The Wall Street Journal reported that an investor consortium believed that Macy’s had been undervalued by the public markets and that they may be willing increase their offer. A letter from an investment bank confirming that the bidders are able to pay for the purchase has been reported.
Bidders may be interested in Macy’s vast property portfolio that could be sold at a profit.
Macy’s has been contacted for comment.
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