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Macy’s mulls $5.8 billion takeover bid as shares soar on news of deal

by Celia

The long-suffering shareholders of Macy’s (M) just got an early Christmas present.

Macy’s has received a $5.8 billion buyout offer from real estate investor Arkhouse Management and asset manager Brigade Capital Management, a source familiar with the matter told Yahoo Finance late Sunday. The offer – which values Macy’s at about $21 per share – was reportedly made on 1 December. The company’s board is reviewing the offer.

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The Wall Street Journal first reported news of the bid on Sunday.

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Macy’s declined to comment to Yahoo Finance.

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The offer price represents a 32.4% premium to Macy’s closing stock price on 30 November.

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Shares rose 19% to close at $20.78 on Monday.

To be sure, Macy’s board – led by a mix of retail veterans such as former Home Depot CEO Frank Blake – has a lot to consider.

For starters, Macy’s all-time share price high of $70.99 was set on 15 June 2015, according to Yahoo Finance data.

At Friday’s close, Macy’s shares changed hands for $17.39.

Meanwhile, as recently as 2022, investment bank Cowen valued Macy’s real estate holdings alone at between $6 billion and $8 billion.

Macy’s has a valuable real estate portfolio, led by its iconic Herald Square location in New York City. Valuations of the trophy property by various money managers have ranged from $3 billion to $4 billion over the past decade.

“Macy’s has some valuable real estate assets, including its Herald Square location, which makes Macy’s more attractive as a target. While the company has monetised some of its real estate, there is likely more to be done,” Citi analyst Paul Lejuez said in a note to clients today.

The company also has to weigh how disruptive a buyout process could be by 2024.

Macy’s is in the midst of the holiday shopping season, with earnings due in mid-to-late February. In February 2024, longtime Macy’s executive Tony Spring will take over as CEO from the retiring Jeff Gennette.

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