Macy’s stock has recently seen a significant increase. At the same time, the takeover saga continues. While the investor group Arkhouse and Brigade Capital were previously rebuffed with their takeover offer for the traditional US department store chain, the potential buyers are now increasing their bid.

Macy’s: Traditional department store chain in the US Before we get into the details of the improved takeover offer, let me first introduce you to the object of desire: Macy’s is one of the leading operators of department store chains. The company owns around 670 stores in 45 US states, Guam, and Puerto Rico. Furthermore, the company operates around 40 stores under the brand name Bloomingdale’s in 12 US states.

The department stores offer a comprehensive range of goods including women’s, men’s, and children’s clothing, accessories, cosmetics, furniture, home textiles, and other consumer goods. The stores are usually located in urban areas, but vary in size, appearance, and the assortment of goods offered. In addition to the stores, customers can also purchase the offered items through catalogs and the internet.

Beyond the borders of the US, the company is also known for its parade with giant balloons in New York on Thanksgiving Day at the end of November.

Original offer falls on deaf ears At the end of last year, the bidders Arkhouse and Brigade offered $21 per share for Macy’s and were rejected. The argument was that the interested parties allegedly could not provide „proof of a viable financing plan.“ Now the two bidders are increasing their offer: Instead of the original $5.8 billion, they are now willing to pay $6.6 billion for Macy’s. Per share, Arkhouse and Brigade are raising the offer by $3 to $24. The new offer is 33% above the closing price from last Friday.

According to analysts, Arkhouse and Brigade are likely focusing on Macy’s real estate portfolio, which includes lucrative locations such as the flagship store on New York’s Herald Square.

Financing is secured In addition, the investor group has tried to dispel doubts about the financing of the deal: They have revealed that Fortress Investment Group LLC and One Investment Management US are intended as equity partners for the planned transaction.

Macy’s under pressure In the last fourth quarter, things were sluggish for Macy’s. Sales decreased by 1.7% to $8.12 billion. Online sales also weakened by 4%. At the same time, earnings before interest, taxes, and depreciation decreased significantly by 82% to $156 million.

Planned closure of unproductive stores Meanwhile, CEO Tony Spring presented the company’s new strategic initiative on February 28. According to this, the closure of 150 „unproductive“ stores, the modernization of the entire business operation, and the strengthening of the Macy’s brand are planned. This is how Macy’s plans to return to the path of growth.

For fiscal year 2024, the company expects sales of $22.2 to $22.9 billion and earnings per share of $2.45 to $2.85.

Stock still significantly below takeover price Despite the jump in share price, the Macy’s stock was still trading at $20.41 last night, well below the offered price of $24 per share. The coming days will show whether the new offer will be well received by shareholders.