Arkhouse Management said it increased its offer for Macy’s Inc. after the department store rejected an initial takeover offer in January.

Investment firm Arkhouse, along with Brigade Capital Management, offered Macy’s $24 per share, or $6.6 billion on March 3. In January, Macy’s rejected a takeover offer from Arkhouse that would have taken the retailer private for $5.8 billion, or $21 a share. Macy’s said the rejection was due to financing concerns. The following month, the firm launched a proxy fight over Macy’s board of directors, nominating nine members. 

“We remain frustrated by the delay tactics adopted by Macy’s Board of Directors (the ‘Board’) and its continued refusal to engage with our credible buyer group. Nonetheless, we are steadfast in our commitment to execute this transaction,” Arkhouse said in a press release. 

Arkhouse is open to raising the price further, according to the release.

Macy’s confirmed that it received the updated offer.

“The Macy’s, Inc. Board will carefully review and evaluate the latest proposal consistent with the Board’s fiduciary duties and in consultation with its financial and legal advisors. The Macy’s, Inc. Board has a proven track record of evaluating a broad range of options to create shareholder value, is open-minded about the best path to achieve this objective and is committed to continuing to take actions that it believes are in the best interests of the Company and all Macy’s, Inc. shareholders,” it said in a press release.

Macy’s will not make any further comments on the offer, it added.

Macy’s ranks No. 17 in Digital Commerce 360’s Top 1000 Database. The Top 1000 ranks North America’s leading retailers by online sales. It is also the second-largest Apparel & Accessories retailer in the database.

Arkhouse responds to Macy’s rejection

Arkhouse’s latest offer directly addresses points Macy’s raised.

“The notion that the plan we are proposing is not actionable is simply not true. We have tried repeatedly to address the concerns raised by the Company. … We have struggled to understand what reservations the Board might have at this point and urge the Company to engage with us in good faith with the goal of reaching a transaction that would unlock significant value for all stockholders,” Arkhouse said.

Macy’s previously cited concerns about financing in statements responding to Arkhouse’s first bid and the nominations to the board of directors. 

“Arkhouse and Brigade have yet to provide any financing details that would enhance the actionability of their proposal despite multiple opportunities to do so, and instead of attempting a constructive dialogue, Arkhouse has chosen to launch a proxy contest,” Macy’s said in February. 

Arkhouse responded with more details about how it would finance the deal. Specifically, investors Fortress and OneIM will help secure financing, the firm said. Those finance sources represent 100% of the capital needed to purchase all the Macy’s shares the firm doesn’t already own, it said.

Macy’s Q4 results

Macy’s reported results on Feb. 27 for its Q4 and fiscal 2023 ended Feb. 3. In Q4, Macy’s net sales declined 1.7% to $8.12 billion, and full-year sales declined 5.5% to $24.44 billion. 

The retailer also announced a new strategy, “A Bold New Chapter.” Macy’s plans to close 150 “unproductive” locations by the end of 2026 while growing its luxury Bloomingdale’s and Bluemercury locations. The plan also includes reinvestment in the Macy’s name and branding, with changes to assortment and modernized stores. Macy’s said the plan will start paying off in fiscal 2025, with lower capital spending, sales growth and free cash flow returning to pre-pandemic levels.

Arkhouse commented on the quarterly results and new strategic plan in its updated offer. 

“While the restructuring plan Macy’s unveiled last week failed to inspire investors, the fourth quarter earnings and year-end results have given us further confidence in the long-term prospects of the Company if redirected as a private company,” the firm said.

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