Macy's Receives $5.8 Billion Buyout Offer: Report

By Jace Dela Cruz

Dec 11, 2023 12:37 AM EST

Department store chain Macy's Inc. has reportedly received a buyout offer from Arkhouse Management and Brigade Capital Management, amounting to $5.8 billion, according to sources familiar with the matter. 

(Photo : YUKI IWAMURA/AFP via Getty Images)
Shoppers carry Macy's bags during "Black Friday" in New York on November 24, 2023, the unofficial start of the holiday shopping season.

Macy's Receives Buyout Offer

The unnamed sources told CNBC on Sunday that the proposed buyout values Macy's at $21 per share, a premium compared to its closing price of just over $17 a share on Friday, a 17% decline since the beginning of the year. 

According to the sources, Arkhouse Management, a company primarily focusing on real estate investment, and Brigade Capital Management, an asset management firm, were both willing to offer a higher bid based on due diligence.

Facing challenges in the ever-evolving retail landscape, Macy's has struggled to compete with online rivals. Despite efforts to revitalize its brick-and-mortar stores, such as the announcement of 30 new locations in strip malls in October, the retailer has seen a 7% year-over-year decline in sales, according to CNBC.

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Macy's Has Become an Acquisition Target

The company's recent quarter results exceeded Wall Street expectations, with improvement attributed to sales from owned brands like Bloomingdale's and Bluemercury rather than the flagship Macy's chain. 

The department store's declining sales and increased competition from online players and brands preferring direct-to-consumer sales over wholesale through a department store have made it an attractive target for acquisition.

The buyout offer comes amid a challenging year for retailers, with fluctuating interest rates and high inflation affecting consumer spending. While online shopping has shown resilience, the overall outlook for the holiday season remains uncertain, with several retailers issuing cautious fourth-quarter outlooks. 

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