Macy's has turned down the $5.8 billion take-private offer it received from Arkhouse Management and Brigade Capital Management last month. The retailer cited "lack of compelling value" in the offer. The rejection follows an announcement last week from Macy's that it would close five more stores and cut its workforce by 3.5%.
The two companies already have a big position in the department store giant and offered to buy the Macy's stock they don't already own for $21 a share, representing a 32% premium to where shares closed the day before the offer was made. When the offer was made public by the Wall Street Journal, the publication reported that the investor group believes Macy's is undervalued in the public markets and would be willing to raise its offer subject to due diligence.
However, it was quickly noted by several analyst firms that the value of Macy's real estate exceeded the offer.
Macy's operates nearly 500 stores under its own name, with another 30 locations of Bloomingdale's locations, and some discount and smaller-format shops.
J.P. Morgan analytics estimated the value of the real estate holdings at $8.5 billion, or $31 a share, including the $3 billion value of the company's famous flagship Herald Square property in Manhattan. Investment bank Cowen valued the real estate holdings at between $6 billion to $8 billion. Evercore ISI says $5 billion to $7 billion for everything, with Herald Square between $900 million and $1.5 billion. TD Cowen — total value of $7.5 billion to $11.6 billion.
|Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
