Arkhouse Management and Brigade Capital Management are upping the ante on their proposed bid to acquire Macy’s, the 166-year-old department store giant. The two investment firms on Sunday submitted a new all-cash proposal to purchase all the shares they don’t already own for about $24 each. The proposed deal is valued at approximately $6.6 billion.
That’s a big step up from the proposal Macy’s rejected last month, which offered $21 per share for $5.8 billion.
“We remain frustrated by the delay tactics adopted by Macy’s Board of Directors and its continued refusal to engage with our credible buyer group,” Arkhouse managing partners Jonathon Blackwell and Gavriel Kahane said in a statement.
The partners added that Arkhouse is “steadfast” in its commitment to completing the deal. As part of that, they said Arkhouse remains open to increasing their offer if necessary.
Macy’s said in a statement on Sunday that it would “carefully review and evaluate” the group’s latest proposal.
The news sent Macy’s stock higher on Monday, with the shares up almost 15% in mid-afternoon trading.
The latest takeover bid comes after Macy’s reported better-than-expected profits and revenue, even as it announced the closure of 150 stores over the next three years. The move is part of Macy’s new strategy to focus on smaller stores and investment in its upscale retailers — like department store Bloomingdale’s and skincare chain Bluemercury — while moving away from malls.
Macy’s had justified its rejection of the earlier takeover offer, in part, by citing concerns about the firms’ financing plan, adding that there was a “lack of compelling value.” In its latest offer, Arkhouse and Brigade said they had “repeatedly” tried to address those concerns, revealing they had entered a partnership with Fortress Investment Group and One Investment Management.
Arkhouse and Brigade have also nominated a slate of nine candidates to join Macy’s board of directors, which currently has 14 members.