What: Macy's Inc. is negotiating a confidentiality agreement with Arkhouse Management and Brigade Capital Management, which could pave the way for these investors to potentially increase their buyout offer.

Why it is important: This development indicates a possible shift in Macy’s stance towards its suitors, suggesting openness to a takeover after initially rejecting the proposed USD 21 per share offer. The move signifies a critical juncture for Macy's, balancing shareholder interests with strategic decisions amidst evolving retail dynamics and real estate considerations.

Macy's Inc. has shown signs of warming up to the idea of a takeover by Arkhouse Management and Brigade Capital Management, having entered negotiations for a confidentiality agreement that may lead to a revised offer. This follows a period of reluctance from Macy's to open its books for due diligence, citing concerns over the initial offer's financing and valuation. However, recent discussions, including a meeting between Macy’s executives and the investors, have made progress towards potential due diligence access. This comes amid a proxy battle initiated by Arkhouse, advocating for board changes to steer Macy's in a new direction. The investors aim to capitalise on Macy's real estate assets without necessarily closing stores, contrary to Macy’s concerns about asset monetisation strategies. This unfolding scenario reflects the complex interplay between shareholder value, strategic asset management, and the future direction of one of America’s iconic retail brands.

Macy's engages in negotiations with Arkhouse and Brigade for potential takeover