U.S. department store chain Macy’s (M) has rejected the $5.8 billion U.S. takeover offer it received from Arkhouse Management due to concerns about the deal’s financing.
Arkhouse, a private real-estate investment firm and its partner Brigade Capital, a hedge fund, had offered to buy Macy’s for close to $6 billion U.S. and take the retailer private.
Macy’s has struggled financially in recent years as it faces growing competition from online retailers. The company’s stock has declined 30% in the past five years.
The two investment firms submitted a proposal in December 2023 to acquire Macy’s at a price of $21 a share, which represents a nearly 20% premium to the stock’s current price.
However, Macy’s has now rejected the offer, saying it was not financially attractive or credible enough to accept.
Macy’s said in a written statement that its board of directors had “…concerns regarding Arkhouse and Brigade’s ability to finance their proposed transaction.”
Macy’s added that it is not running a formal sale process and no other unsolicited bidders have emerged for the company.
Some analysts had said that the Arkhouse offer undervalued Macy’s real estate footprint, which has been valued at more than $11 billion U.S.
Macy’s currently owns 722 total stores. Last week, the department store operator said that it is eliminating 2,350 jobs and closing five stores to streamline its operations across the U.S.
The stock of Macy’s has declined 25% in the last 12 months and currently trades at $17.63 U.S. per share.
