What is Macy’s Next Move?


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From wondery I'm David Brown, and this is business wars daily. On this Monday, January 29, last month, we told you about an unsolicited bid to take over Macy's, a nearly $6 billion bid. At that, Arkhouse Management and Brigade capital teamed up to approach Macy's with a buyout offer. Their proposal? Arkhouse and brigade would acquire any Macy's stock they don't already own at $21 a share. Now that appears to be a fairly good deal. Currently, Macy's stock is hovering around $18 a share. But alas to that takeover offer, Macy's has officially said, no thanks. Last week, the retailer dismissed the proposal, first questioning whether the investment firms even had the money to finance the deal. According to the New York Times, Macy's board also said that the deal, quote, lacks compelling value. Well, that wasn't the answer Arkhouse and brigade wanted.


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Speaker 3
See, while Macy's has been struggling in recent years to bring shoppers into its doors, it's not necessarily Macy's operations that the firms are after. Arkhouse, after all, is a known investor of real estate. Macy's still owns many of its more than 500 stores. And, well, you can see where this is going. Arkhouse could theoretically buy the retailer, shutter stores, and find other ways to monetize that real estate those stores sit on. But of course, now that's not looking like a possibility. What appeared to spur Macy's dismissal of the deal is Arkhouse threatening to take it directly to shareholders, which could open the doors for a hostile takeover. According to the Wall Street Journal, while Macy's execs have been in private talks with Arkhouse and brigade for weeks now, the wheels apparently weren't turning fast enough for the firms.


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Speaker 3
Shortly after Arkhouse made its threat to subvert Macy's executives, the retailer made its no very clear what's next. Well, there are a few possibilities. Arkhouse and Brigade could up the ante with a more enticing offer, or they could go straight to shareholders and follow through with that threat of a hostile takeover. But there's a third possibility. Remember, this offer was unsolicited, as in came out of nowhere. And where there is one unsolicited offer, well, you know, there can be many that follow. In 2021, Arkhouse made an unsolicited offer to buy the developer, Columbia Property Trust. Shortly after that, another buyer came into focus and ended up buying Columbia for $3.9 billion, according to the New York Times. So there's a chance another buyer's lurking out there waiting for the right time.


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To make its offer.


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Speaker 3
As the deal with Arkhaus and Brigade has appeared to have ground to a halt, there are undoubtedly a lot of eyes on Macy's right now, wondering what will come next. And some of those eyes belong to Macy's rivals like Nordstrom. See, when Arkhouse and Brigade first made the offer last month, many analysts thought the biggest winner in all of this would be rivals like Nordstrom. But simply, if Arkhouse did end up closing Macy's stores, where would department store devotees end up? Nordstrom, of course. But alas, while this deal hangs in the balance, Nordstrom and other Macy's rivals must surely be holding their collective breath. And in the meantime, this retail roller coaster may continue to throw everyone involved for a loop from wondering this is business wars daily. I'm your host, David Brown. Written and produced by Jessica Yarmoski.


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