Why Is Department Store Chain Macy's Stock Surging Today?

Arkhouse Management Co. LP and Brigade Capital Management, LP have proposed a revised takeover bid for Macy’s Inc M for $24.00 per share in cash.

The new proposal is being seen as an attempt to persuade the department store chain to reconsider their previous offer.

This development follows Macy’s rejection of the initial proposal, citing its inadequacy. The offer marks a 14% increase from their prior bid of $21 per share.

This proposition represents a substantial premium of 33.3% over its March 1, 2024, closing price of $18.01.

“We continue to offer the Company an attractive alternative solution through a sale of the Company at a substantial premium. This would provide Macy’s stockholders with significant value and immediate liquidity,” said Gavriel Kahane and Jonathon Blackwell, Arkhouse Managing Partners.

Meanwhile, Macy’s stated, “The Macy’s Inc Board will carefully review and evaluate the latest proposal…”

The company’s fourth-quarter revenue declined 1.4% year-on-year to $8.12 billion, missing the consensus of $8.15 billion.

It has also decided to close about 150 unreproductive locations through 2026.

Macy’s is currently facing a board challenge from Arkhouse Management, which nominated nine director candidates last month, including individuals with expertise in retail, real estate, and capital markets, in an effort to influence the department store’s strategic direction.

Price Action: M shares are trading higher by 15.2% at $20.75 in premarket on the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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