Macy’s said Monday it had terminated talks with activist investors ArkHouse Management and Brigade Capital, citing a lack of financing to buy the world’s largest department store.
Macy’s board of directors “unanimously decided to terminate discussions with Arkhouse and Brigade because discussions did not result in a viable proposal that would secure financing at a compelling value,” the company said in a statement.
The two companies entered into exclusive negotiations in March after Arkhouse and Brigade raised their offer to $21 to $24 per share in the second half of 2023, with the intention to increase it further following further due diligence, according to a statement.
As recently as June, investors offered a cash purchase price of $24.80 per share, but the deal would have valued the iconic chain at $6.9 billion, which Macy’s board said was “not compelling.”
Macy’s shares plummeted Monday morning, falling more than 15% to $16.
Brigade and Arkhouse did not immediately respond to requests for comment.
Macy’s claimed it “provided thousands of documents with a level of detail far beyond that typically required to secure financing for the acquisition of a publicly traded company,” and ultimately presented an “unacceptable” proposal on June 26.
Macy’s said it plans to refocus on its strategic plan, which could include closing stores, to boost sales and profits.
“Our team remains fully focused on creating value for our shareholders,” Chairman and CEO Tony Spring said in a statement.
“While still in the early stages, I am pleased that our efforts are on track, reinforcing our belief that the company can return to sustainable profitable growth, accelerate free cash flow generation and enhance shareholder value,” he added.
