Shares of Macy’s (M) sank in early trading on Monday after announcing it had ended buyout talks with Arkhouse Management and Brigade Capital Management. In a statement, the retailer says the discussions “failed to lead to an actionable proposal with certainty of financing at a compelling value.”
Yahoo Finance anchors Brad Smith and Madison Mills discuss the announcement in the video above.
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This post was written by Stephanie Mikulich.
Video Transcript
Right there.
You’re looking at shares of M this morning, Macy’s shares are plunging after announcing its board has unanimously decided to end talks with a House and Brigade who had been looking to take the retailer private for about $6.9 billion.
Macy’s saying in a statement that the proposal quote lacks certainty of financing here shares moving lower pre market right now, Mattie.
Yes, it’s interesting.
This is a unanimous decision from the board and this began with a $5.8 billion offer from the investor group back in September.
This is again the talks between our house management and Brigade capital management on that buy out proposal for Macy’s.
I do want to mention that we’re seeing some sentiment movement in the broader retail space.
You’re looking at shares of Macy’s right now down over the past five days, we get that adjustment after the amount of sin that we’re seeing right now.
I bet it’s down a little bit more than 2% of the five days at the moment.
But we’re also seeing shares of Nordstrom and coal coal sinking to the downside off of this news here.
Now again, as Brad was mentioning uh Macy’s saying that this revised offer that they got in from our house and Brigade lacked compelling value and the company is going to embark on their own turnaround plan.
Obviously Wall Street, not having a lot of faith in their ability to have that turnaround plan in their own hands moving forward here.
Also, the company mentioning in a statement on Monday that their financing commitment letters accompanying their revised offer were insufficient to give the board confidence to move forward with this potential deal.
And remember this comes after there was a revised offer that was a little bit higher.
We were looking at 2480 a share that was up from 24 which was the number that Macy’s had previously said was not compelling.
Adding 80 more cents per share also not compelling.
Yeah, just a question of how transformative this business could be with or without an acquisition uh or some type of partnership on equity side to take place and really institute some of the pilots that Macy’s has already set into motion also capitalizing on the success that they’ve seen in that Blue Mercury or a little luxury side of the business on an extended scale.
Uh But they’re also trying to test out these new types of locations where it’s more trimmed in the store count or at least the square footage operation uh and the mix of product as well.
Yeah, a really good point.
The product mix is critical.
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