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Report: Investor group sweetens bid for Macy’s

Arkhouse Management and Brigade Capital Management have reportedly raised their offer to acquire Macy's, Inc.

The two investment firms seeking to take Macy’s, Inc. private have raised their offer — for the second time.

The investor group — composed of real estate investment firm Arkhouse Management and global asset manager  Brigade Capital Management — have raised their offer to buy the department store giant by about $300 million, reported the Wall Street Journal. The increased offer is for $24.80 a share, or $6.9 overall, the report said. 

The investor group has been actively pursing Macy’s since December, when it made an all-cash offer of $21 a share, or about $5.8 billion, to acquire the company. The Macy’s board rejected the offer, citing “lack of compelling value” in the proposal. In March, Arkhouse and Brigade increased their offer to $24 a share, or about $6.6 billion. Macy’s had then said it was engaging with Arkhouse and Brigade Capital over their revised buyout proposal.

In April, Macy’s avoided a proxy fight with Arkhouse by appointing two of the firm’s nominees — Richard (Ric) Clark and Richard (Rick) L. Markee — to its its 15-person board board of directors. The two managing partners of Arkhouse issued a statement saying the two board appointments would aid the company’s continuing efforts to purchase Macy’s.

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"Ric Clark and Rick Markee bring tremendous dealmaking experience to Macy’s board and will be instrumental in maximizing value for shareholders," said Gavriel Kahane and Jonathon Blackwell, Arkhouse managing partners.As a result of our efforts, our buyer group has begun receiving due diligence to progress discussions toward a potential transaction to acquire the company."

The investor’s group's latest offer comes several months after Macy’s unveiled a new business strategy under the leadership of Tony Spring, who took the reins as CEO in February.  The plan, dubbed “A Bold New Chapter,” involves closing closing approximately 150 underperforming Macy’s locations and updating the more productive ones.

The strategy also involves an increased focus on luxury and beauty. Macy’s plans to open about 15 Bloomingdale’s stores and at least 30 Bluemercury stores during the next three years.

“A Bold New Chapter serves as a strong call to action," said Spring in February. "It challenges the status quo to create a more modern Macy’s, Inc. We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value."

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