Macy’s scraps talks to go private for $6.9B with activist investors Arkhouse and Brigade

Macy’s ended talks with the activist investors Arkhouse Management and Brigade Capital, claiming they lack the funds to acquire the largest department store in the world, Macy’s said on Monday.

The Macy’s board has “unanimously determined to terminate discussion with Arkhouse and Brigade that have failed to lead to an actionable proposal with certainty of financing at a compelling value,” the company said in a statement.

The companies entered into exclusive discussions in March after Arkhouse and Brigade upped their offer to $24 per share from $21 late 2023 and indicated that they would go even higher after more due diligence, according to the statement.

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Most recently in June, the investors offered a purchase price of $24.80 per share in cash – a deal valuing the iconic chain at $6.9 billion that Macy’s board said was “not compelling.”

Macy’s shares cratered on Monday, down by more than 11% to $16.85.

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Brigade and Arkhouse did not immediately respond to requests for comment.

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Macy’s claims that it provided “thousands of documents with a level of detail that went well beyond what is customarily required to obtain financing for a public company acquisition,” and in the end produced an offer on June 26 that was “unacceptable.”

Macy’s will return to focusing on its strategic plan — which includes closing stores — to improve the company’s sales and profits, the company said.

“Our team continues to be singularly focused on creating value for our shareholders,” chairman and chief executive Tony Spring said in a statement.

“While it remains early days, we are pleased that our initiatives have gained traction, reinforcing our belief that the company can return to sustainable, profitable growth, accelerate free cash flow generation and unlock shareholder value,” he added.

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