Macy’s and investment company Arkhouse Management appear to be nearing a potential agreement.
Arkhouse is seeking access to Macy’s financial records to further evaluate a possible takeover offer.
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This development follows Arkhouse and Brigade Capital increasing their initial offer to $24 per share for Macy’s outstanding stock, valuing the company at $6.6bn.
To solidify its offer and determine if a higher bid is possible, Arkhouse has requested access to Macy’s financial records, a standard process known as due diligence.
While Macy’s initially rejected Arkhouse’s bid due to concerns about financing, the American department store chain has shown a willingness to negotiate.
This shift is evident in its consideration of a confidentiality agreement that would grant Arkhouse access to the requested financial information.
However, a potential takeover isn’t the only option on the table. Arkhouse is reportedly also continuing its push for control of Macy’s board through a proxy fight.
The investment business nominated nine new directors to the board, aiming to influence Macy’s strategic direction and potentially sway the board’s decision on the takeover offer.
Negotiations are ongoing, with the possibility of Arkhouse increasing its offer. Finalising a confidentiality agreement would allow it to strengthen its financial backing and potentially revise its bid.
Despite progress in takeover talks, the proxy fight remains a possibility. The outcome of this fight could significantly impact the future of Macy’s and the potential deal.
Macy’s board, committed to acting in the shareholders’ best interests, could consider an even higher offer from Arkhouse if deemed beneficial.
Arkhouse and Brigade Capital, in December 2023, submitted a proposal to acquire the chain for $21 a share, valuing the company at $5.8bn.
This strategic move is aimed at privatising the department store chain, responding to challenges posed by fierce competition from online retailers, which has impacted its market value.
