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Macy's activist investors raise buyout bid to $6.6 billion

Macy's (M) activist investor groups Arkhouse Management and Brigade Capital Management raised their buyout bid on the retailer to $6.6 billion. Macy's rejected a previous bid valued at $5.5 billion in January.

Yahoo Finance Retail Reporter Brooke DiPalma shares the details of the story as Macy's leadership considers the offer after announcing plans to shutter 150 stores through 2026.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

[MUSIC PLAYING]

BRAD SMITH: An activist investor group looking to buy Macy's raised its offer on the retailer to $24 a share from $21 a share. Pushed the valuation to $6.6 million. Macy's rejected the original bid from art house management and Brigade Capital Management back in January. Yahoo Finance's Brooke DiPalma has the details on this one. Hey, Brooke.

BROOKE DIPALMA: Good morning, Brad. Good morning, Seana. That's right. This is the second offer from activist shareholders Arkhouse alongside its partner Brigade Capital Management. So how exactly does this offer stack up compared to the previous offer that Arkhouse presented? Well, this is now $24 a share. That's a 14% increase from its original proposal. It's also a 51% premium to Macy's share price on November 30, 2023 when news originally broke out of that first buyout offer.

It's also a 33% premium to where Macy's shares closed on Friday at $18.01. Now Macy's did confirm in a release that it received the proposal and it will review it. And this is less than 1 week after Macy's laid out its original growth strategy. And Yahoo Finance's did get access to Arkhouse management. We did speak to Gabriel Kahane last week, and he told Yahoo Finance that that growth strategy that Macy's has laid out is simply not enough.

He said that incremental changes related to digital display systems, merchandising, or even store closures have been tried before and they are unlikely to deliver any material value to shareholders. They said that Macy's have their eye on margin improvements where they're focused there the company is melting away, now many speculated that Arkhouse is solely focused on the real estate Arkhouse telling Yahoo Finance that their focus on giving a premium return to shareholders than the real estate and the retail business.

And so we'll really see how this all plays out. Macy's currently reviewing that second offer from Arkhouse management guys.

SEANA SMITH: We're seeing shares rally here ahead of the open. All right. Brooke, great job. Thanks so much.

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