(RepublicanView.org) – Investing firm Arkhouse Management and asset manager Brigade Capital Management are bidding for the high-end retail giant Macy’s.
The group of two firms have joined forces hoping to buy the remaining Macy’s stock that it doesn’t already own at $210 per share for a total of $5.8 billion. The firms plan to make the retailer private once again if their bids are accepted. People close to the matter have said they already own a significant share of Macy’s, according to Fox News.
Leaders with both Macy’s and the investment groups have been in talks. The retailer’s board has discussed the offer since it was submitted on December 1. However, no details of their general position have been released.
Reports suggest the investors believe that Macy’s is currently undervalued. The retailer’s stock has taken a massive hit over the past decade. It was valued at $70 per share in 2015. It’s currently hovering in the low 20s. A bank has already backed the groups’ ability to gather the funding necessary for the buyout.
The retailer earned over $24 billion in sales last year. It earned $28 billion in 2014, Fox News reported. The hit in its bottom line is believed to stem from online retailers. Many of them have the advantage of only operating virtually without the overhead and sporadic regulations of physical locations. That agility has allowed ecommerce leaders to undercut several big-name retailers.
However, Macy’s still maintains a well-known brand in American culture. Its image is bolstered during every holiday season with its Macy’s Thanksgiving Day parade in New York City. It also owns other major brands, including Bloomingdale’s and Bluemercury, a chain dedicated to skincare.
The offer comes as Jeff Gennette, the current CEO of Macy’s, is set to retire in 2024. Bloomingdale’s frontman Tony Spring is expected to take his place. Gennette has been leading an effort to restructure Macy’s to improve both profitability and efficiency. The result has been smaller retail sites and the closing of stores that performed poorly.
However, some analysts warn about challenges ahead of the buyout and disagree with the assertion that Macy’s is undervalued. That means financing a buyout could prove difficult.
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