Macy’s (NYSE: $M) Mulling $5.8 Billion Buyout Offer


Macy’s (NYSE: $M) shareholders, who have endured a challenging period, have received an unexpected Christmas present. Real estate investor Arkhouse Management and asset manager Brigade Capital Management have extended a buyout offer of $5.8 billion for Macy’s, valuing the company at approximately $21 per share.

This proposal, submitted on December 1, is currently under consideration by Macy’s board, as reported by a source familiar with the matter to Yahoo Finance on Sunday, a story initially covered by The Wall Street Journal.

The offer price represents a substantial 32.4% premium over Macy’s closing stock price on November 30. In response to this development, Macy’s shares surged by 19%, closing at $20.78 on Monday.

Macy’s, led by a board that includes retail veteran Frank Blake, the former CEO of Home Depot, has various factors to contemplate in evaluating this offer.

It’s noteworthy that Macy’s stock achieved an all-time high of $70.99 on June 15, 2015, based on Yahoo Finance data. As of the most recent close on Friday, Macy’s shares were priced at $17.39. Additionally, in 2022, investment bank Cowen valued Macy’s real estate holdings alone in a range of $6 billion to $8 billion.

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Macy’s possesses a valuable real estate portfolio, prominently featuring its iconic Herald Square location in New York City. Various estimates from financial experts over the past decade have valued this prime real estate asset between $3 billion and $4 billion.

Citi analyst Paul Lejuez noted that Macy’s attractive real estate, including the Herald Square location, enhances its appeal as a potential target, suggesting there is untapped value in the company’s real estate holdings.

However, Macy’s board faces the challenge of evaluating how disruptive a buyout process might be, especially considering the ongoing holiday shopping season. The company is set to publish its results in mid-to-late February, coinciding with the appointment of Tony Spring as the new CEO in February 2024, succeeding the retiring Jeff Gennette.

What You Should Know About Macy’s

Macy’s, Inc. is a retail company with an omni-channel presence, operating stores, websites, and mobile applications under three distinct brands: Macy’s, Bloomingdale’s, and Bluemercury. These brands offer a diverse range of merchandise, including apparel and accessories for men, women, and kids, cosmetics, home furnishings, and various consumer goods.

The company has a widespread presence, with approximately 722 store locations across 43 states, the District of Columbia, Puerto Rico, and Guam.

Macy’s, Inc. conducts its operations through several entities, namely Macy’s, Macy’s Backstage, Market by Macy’s, Bloomingdale’s, Bloomingdale’s The Outlet, Bloomies, and Bluemercury. Additionally, Bloomingdale’s has a presence in Dubai, United Arab Emirates, and Al Zahra, Kuwait.

The company features a variety of private label brands, including Alfani, And Now This, Aqua, Bar III, Belgique, Charter Club, Club Room, Epic Threads, Family PJ’s, First Impressions, Giani Bernini, Holiday Lane, Home Design, Hotel Collection, Hudson Park, Ideology, I-N-C, jenni, JM Collection, and Karen Scott.

What is the price prediction for $M stock?

Thirteen analysts providing 12-month price forecasts for Macy’s Inc. have set a median target of 15.00, ranging from a high estimate of 19.00 to a low estimate of 11.00. This median estimate signifies a -12.49% decrease from the current price of 17.14.

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