Macy's shareholders, who have endured a challenging period, may now witness a significant turn of events. The renowned retailer Macy's has been presented with a substantial buyout offer, reportedly amounting to $5.8 billion.
This proposal, put forward by real estate investor Arkhouse Management and asset manager Brigade Capital Management, was brought to light by Yahoo Finance late Sunday.
Valuing Macy's at approximately $21 per share, the offer submitted on December 1 is currently under consideration by the company's board, with initial reports of the offer emerging from The Wall Street Journal earlier on the same day.
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Macy's Buyout: Investors Poised to Increase Offer
The investors interested in Macy's think that the market is still unaware of the company's value. They are willing to raise their offer to buy the company, but only after they do more research. An investment bank's letter backs up its promise and proves that the group has the money to do the deal.
Macy's owns about 500 shops, including well-known brands like Bloomingdale's and Bluemercury. The company's profits decreased slightly last year, from $1.2 billion in 2021 to $1.2 billion in 2022, on $24.4 billion in sales.
Macy's has been a takeover target, and activists are interested in it because it owns a lot of substantial property. Macy's has been changing under CEO Jeff Gennette, who is retiring next year. They have closed stores that weren't doing well, added new names, and improved their logistics.
Meanwhile, Macy's chose not to provide a statement to Yahoo Finance regarding the matter. The offered price represents a 32.4% increase over Macy's closing stock price on November 30.
Macy's board, led by a mix of retail experts, including former Home Depot CEO Frank Blake, faces a substantial decision. It's worth noting that Macy's stock reached its all-time high of $70.99 on June 15, 2015, according to Yahoo Finance data. As of the most recent close on Friday, Macy's shares were traded at $17.39
Unlocking the Hidden Value of Macy's
Macy's, a renowned retail giant, possesses a wealth of hidden assets beneath its stores. These valuable properties, including the prestigious Herald Square location in New York City, are often underestimated. Recent estimates suggest that Macy's real estate holdings could be worth between $6 billion and $8 billion, attracting attention from investors.
The company has been exploring ways to tap into this hidden value by entering partnerships to develop parts of its properties into mixed-use spaces. With a $5.8 billion buyout offer, Macy's faces a significant decision.
This offer, representing a 32.4% premium over its recent stock price, highlights the potential within the company.
Led by an experienced board, including former Home Depot CEO Frank Blake, Macy's must consider whether to unlock this hidden wealth through a buyout or continue its strategic development plans. As the holiday season unfolds, the retailer stands at a pivotal juncture where its real estate assets could redefine its future.
Macy's can turn its real estate into cash by using it as collateral or selling parts of it. Even if the real estate holdings matched Macy's market value of about $5 billion, the core business, including its e-commerce division, could be accessible.
This strategy aims to enhance shareholder value, and Macy's shares could become attractive for value investors if their price drops further.
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