Arkhouse has Financing in Place to Take Macy’s Private at $5.8 Billion Bid
Arkhouse, led by managing partner Gavriel Kahane, has stated that it has the financing ready to acquire Macy’s through a bid of $5.8 billion. However, the activist investor has faced obstacles due to a lack of cooperation from the department store retailer. Without access to due diligence, Kahane believes that it is unlikely any bank would provide committed financing.
Kahane stated on CNBC’s “Money Movers” that the coming response from Macy’s management will determine how Arkhouse proceeds. The investment firm has previously promised to take all necessary steps to acquire Macy’s, including reaching out directly to shareholders.
Arkhouse’s Bid of $21 a Share Faces Rejection from Macy’s Board
In December, Kahane’s Arkhouse, along with Brigade Capital, submitted an unsolicited bid to acquire Macy’s and take the company private at a price of $21 per share. This offer represented a premium of over 32% for Macy’s shareholders. Investment bank Jefferies has provided a highly confident letter, affirming its belief in the firms’ ability to secure the necessary capital for the deal.
Macy’s board, however, rejected the offer on Sunday, expressing doubt over the proposed financing, stating it is “highly unlikely” that Arkhouse and Brigade would be successful. Furthermore, the retailer refused to enter into a non-disclosure agreement or allow due diligence to move forward, citing potential distractions to their management team.
Arkhouse Considers Increasing Bid if Macy’s Management Cooperates
Despite the rejection from Macy’s board, Arkhouse has hinted that it may increase its bid above the initial $21 per share offer. The condition, however, is that Macy’s management is willing to sign a mutual non-disclosure agreement and allow for the necessary due diligence to begin.
The activist investor believes that additional information and access to the retailer’s operations will allow for a more accurate valuation of the company. If Macy’s management agrees to these terms, Arkhouse is open to revisiting and potentially raising its bid.
Overall, the future of the Macy’s acquisition remains uncertain, with Arkhouse awaiting a response from the retailer’s management to determine the next steps. The bid represents a significant opportunity for both Arkhouse and Macy’s shareholders, but cooperation and transparency will be crucial for the deal to move forward.
Analyst comment
Negative news: Arkhouse’s bid to take Macy’s private at $5.8 billion faces rejection from Macy’s board, who doubt the proposed financing and refuse due diligence. Arkhouse may increase bid if Macy’s management cooperates. The future of the acquisition remains uncertain, pending a response from Macy’s management.
