Macy's, Inc. has terminated discussions with Arkhouse and Brigade after failing to receive an actionable proposal with certainty of financing at a compelling value. The company spent months engaging with the two parties, with Arkhouse and Brigade increasing their proposal to $24.00 per share from the initial $21.00 offer. However, Macy's expended significant resources addressing extensive diligence requests and facilitating meetings with senior management to no avail.
The latest proposal from Arkhouse and Brigade, which came in at $24.80 per share in cash, was deemed non-actionable as the financing papers were insufficient to give the board confidence in a fully committed, financed, and viable offer within a reasonable period. The proposal was also within a range previously communicated to Arkhouse and Brigade as not compelling.
The board unanimously determined that the proposal lacked certainty of financing and did not deliver compelling value, leading to the termination of discussions and the company's full focus returning to enhancing value for shareholders through its standalone operating plan.
Macy's, Inc. reiterated its commitment to shareholder value creation and confidence in its "a bold new chapter" strategy. The strategy, which focuses on strengthening the Macy's nameplate, accelerating luxury growth, and simplifying and modernizing operations, has shown early signs of success. The company's second-quarter 2024 earnings report, expected next month, will provide additional detail on the progress made with the strategy.
In this process, Bank of America Securities and Wells Fargo Securities acted as financial advisors, while Wachtell, Lipton, Rosen & Katz provided legal advice to Macy's, Inc.
The company is adamant about creating value for its shareholders and is confident in its ability to return to sustainable, profitable growth, accelerate free cash flow generation, and unlock shareholder value through its strategic initiatives. Following these announcements, the company's shares moved -12.0%, and are now trading at a price of $16.8. For more information, read the company's full 8-K submission here.
