Macy’s has rejected a 5.8 billion dollars takeover bid from investors Arkhouse Management and its partner Brigade Capital Management, citing concerns over financing.
“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,” said Jeff Gennette, chairman and CEO of Macy’s, Inc.
Despite Jefferies Group, financial advisor to the investor, providing a highly confident letter supporting the ability to raise the necessary funds for the transaction, Macy’s added that the investor group failed to address the board’s concerns regarding Arkhouse and Brigade’s ability to finance their proposed transaction.
Arkhouse, which owns a significant stake in Macy's, had asked the company to respond this week without further delaying substantive discussions.
“We believe Macy’s investors support a privatisation 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,” Arkhouse said in a statement.
As a part of the restructuring process, Macy’s is said to be laying off about 3.5 percent of its total headcount, which amounts to roughly 2,350 employees, and also closing five Macy’s locations.
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