Macy's investors mount $5.8 billion buyout bid
By Abigail Summerville
(Reuters) -An investor group consisting of Arkhouse Management and Brigade Capital has made a $5.8 billion offer to take department store chain Macy's (NYSE:M) private, according to a person familiar with the matter on Sunday.
Arkhouse Management, a real-estate focused investing firm, and Brigade Capital Management, a global asset manager, submitted a proposal to acquire the Macy's stock they don't already own for $21 a share on Dec. 1, the person said. The Wall Street Journal reported the offer earlier on Sunday afternoon.
The offer for the Bloomingdale's parent is a 20.76% premium from its closing at $17.39 on Friday.
Macy's shares were trading at $20.13, or up nearly 16% on Monday. Fellow department store operators Kohl's (NYSE:KSS) and Nordstrom (NYSE:JWN) also rose about 6%.
The investor group already has a big stake in Macy's through Arkhouse-managed funds and has discussed the proposal with the department store chain, whose board subsequently met to discuss the offer. It is not clear how the retailer views the proposal, the person familiar with the matter said.
«The buyout group is undoubtedly interested in Macy's large real estate portfolio, which has attracted activists and potential buyers in the past,» Morningstar analyst David Swartz said in a note.
J.P. Morgan analysts estimate Macy's total real estate value at about $8.5 billion, or $31 per share, including the iconic Herald Square property worth about $3 billion.
Arkhouse and Brigade believe Macy's is undervalued in the public markets and have indicated a willingness to raise the offer subject to due diligence, the WSJ report said, adding that an investment bank has provided a letter supporting the group's ability to raise the
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