What Happened:
Shares of department store chain Macy’s (NYSE:M) jumped 18.5% in the pre-market session after the company announced it received a revised offer from Arkhouse Management and Brigade Capital to acquire all outstanding shares for $24.00 per share in cash they don't already own. The new offer is for $24 each, or $6.6 billion, up 14.3% from the $21/share offer announced in December 2023. The new offer represents a 33.3% premium to where Macy's shares closed on March 1, 2024.
Gavriel Kahane and Jonathon Blackwell, Arkhouse Managing Partners, highlighted "frustration with Macy's Board of Directors' delay tactics and refusal to engage with their credible buyer group. They emphasized the shareholder concern evident in the stock price selloff following recent restructuring plans and a dividend hike announced by Macy's." Lastly, they reiterated their commitment to executing the transaction by increasing their offer to $24.00 per share in cash, citing "confidence in Macy's long-term prospects as a private company."
Is now the time to buy Macy's? Access our full analysis report here, it's free.
What is the market telling us:
Macy's's shares are very volatile and over the last year have had 18 moves greater than 5%. But moves this big are very rare even for Macy's and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 3 months ago, when the company gained 18.2% after reports from Reuters that Arkhouse Management and Brigade Capital, an investor group, made a $5.8 billion offer to take the company private. The proposal, submitted on December 1, 2023, values Macy's at $21 per share, representing a 20% premium from the company's closing price of over $17/share on Friday, December 8, 2023. The offer, if accepted, would involve acquiring the Macy's stock that the investor group does not already own. The potential privatization of Macy's could instill confidence in Wall Street, especially amid the ongoing macro uncertainty that has plagued many retailers in recent quarters. This development might also be noteworthy for retail investors evaluating their investment strategies in the sector.
Macy's is up 5.5% since the beginning of the year, and at $20.84 per share it is trading close to its 52-week high of $21.67 from March 2023. Investors who bought $1,000 worth of Macy's's shares 5 years ago would now be looking at an investment worth $855.71.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefitting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.