Arkhouse Management proposes enhanced all-cash offer for Macy’s at $24 per share

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In a notable development in the retail and investment sector, Arkhouse Management Co. LP, in collaboration with its partner Brigade Capital Management, has made a revised all-cash offer to purchase the American department store chain, Macy’s, for $24.00 per share. This proposal underscores a significant premium over Macy’s current and unaffected share prices, marking a potential shift in the company’s operational dynamics. The bid is supported by substantial financial backing, including equity capital partners Fortress Investment Group LLC and One Investment Management US, aiming to transition Macy’s into a private entity.

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Arkhouse and Brigade’s latest proposition represents a 51.3% premium over Macy’s share price on November 30, 2023, the day before the initial offer, and a 33.3% premium to the closing price on March 1, 2024. This 14.3% increase from their previous bid of $21.00 per share is indicative of their commitment to acquiring Macy’s and providing its shareholders with substantial value and immediate liquidity.

Arkhouse Managing Partners Gavriel Kahane and Jonathon Blackwell expressed frustration over what they perceive as delay tactics by Macy’s Board of Directors. Despite this, they remain committed to executing the transaction, citing recent company restructurings and a dividend hike that failed to rally investor confidence as further justification for their offer. They believe that taking Macy’s private could offer a more promising direction for the company’s future.

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The bidding group has enlisted Jefferies LLC as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP as transaction counsel, with additional legal and strategic advisement provided by Cadwalader, Wickersham & Taft LLP and Longacre Square Partners, respectively. Morrow Sodali is acting as proxy advisor.

The enhanced offer by Arkhouse and Brigade, if accepted, could significantly alter the landscape for Macy’s, potentially setting a precedent for similar transactions in the retail sector. The involvement of reputable financial backers and advisors suggests a well-structured and serious bid, likely to have broad implications for Macy’s stockholders and the market at large.

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