Macy's rejected the $5.8 billion offer made by Arkhouse Management and Brigade Capital Management in mid-December. As explained by the retail giant, they decided to reject the proposal since they had serious concerns that the group of investors, which already has shares in the establishments, had the ability to "finance their proposed transaction." This was stated by the president and CEO of Macy's, Inc., Jeff Gennette:
The Macy’s, Inc. Board of Directors and management team have a proven track record of evaluating a broad range of options to enhance shareholder value. Following careful consideration and efforts to gather additional information from Arkhouse and Brigade, the Board determined that Arkhouse and Brigade’s proposal is not actionable and that it fails to provide compelling value to Macy’s, Inc. shareholders. We continue to be open to opportunities that are in the best interests of the Company and all of our shareholders.
Arkhouse Management, willing to "direct engagement with stockholders" of Macy's
Arkhouse Management, for its part, was not satisfied with the response provided by Gennette and threatened to present the proposal directly to the multinational's shareholders. In a letter, obtained by Business Wire, the investor group assured that it had provided all the information requested by Macy's, urging the retail giant to "engage expeditiously in good faith discussions":
Jefferies Group LLC has provided a highly confident letter supporting our ability to raise the necessary funds for the transaction. Following conversations between our respective advisors, Macy’s advisors confirmed that they had no further questions regarding our financing. We urge Macy’s to engage expeditiously in good faith discussions with the goal of achieving a mutually agreeable transaction that can provide superior value to stockholders. We are highly motivated to consummate an acquisition of Macy’s and are prepared to pursue all necessary steps, including direct engagement with stockholders, to achieve this goal.
The dispute comes just days after the retail giant announced new cuts. As announced by a spokesperson for the multinational to CNN, they were forced to lay off a total of 2,350 employees (3.5% of their workforce) as well as close five establishments, in a new attempt to adapt to the digital era and online shopping:
As we prepare to deploy a new strategy to meet the needs of an everchanging consumer and marketplace, we made the difficult decision to reduce our workforce by 3.5% to become a more streamlined company.
