M - Macy's: Absence Of Catalyst Is A Cause For Concern
2024-07-18 05:03:48 ET
Summary
- Macy's faced potential acquisition by Arkhouse Management and Brigade Capital, with bids increasing to $24.80 per share.
- The company's new strategy, "A Bold New Chapter", focuses on Macy's store closures, asset sales, and growth of Bluemercury.
- In this article, I will provide my thoughts on the situation of the company following the termination of the buyout discussions.
I previously wrote an article about Macy’s (NYSE: M) in August 2023. You can see that article here . A lot has been going on at Macy’s since then. A new CEO and Chairman was appointed. A new strategy for the future of the company was laid out. And, a group of potential buyers – Arkhouse Management and Brigade Capital (which may be referred to in this piece as the “investor group”) appeared on the scene, relentlessly pursuing an acquisition of the company. The Wall Street Journal reported in December 2023 that the investor group made an offer to acquire the company for $21.00 a share.
Early in March 2024, the WSJ reported that the investor group upped its bid to $24.00 a share. And most recently, on July 3, 2024 the WSJ reported the investor group increased its proposal once again, this time to $24.80 a share. As a result of what seems to be discontent with the way Macy’s board handled its offer, a proxy battle was threatened. This resulted in an agreement, according to which Macy’s board agreed to add two new directors and the investor group agreed to certain standstill provisions. The last buyout price reported, although reflecting a hefty premium of ~38% to the market at the time it was made known to the public, was welcomed by the market with a rather sluggish reaction, leaving a wide margin between the updated buyout price reported and the company’s stock price in the market....
Macy's: Absence Of Catalyst Is A Cause For Concern