Increased Purchase Price Represents a 51.3%
Premium to Company’s Share Price on Nov. 30, 2023, and a 33.3%
Premium to Closing Share Price on March 1, 2024
Fortress Investment Group and One Investment
Management US Identified as Additional Equity Capital Partners in
Proposed Transaction
Arkhouse Urges Macy’s Board to Enter into
Constructive Discussions to Reach a Mutually Agreeable Transaction
at a Significant Premium
Arkhouse Management Co. LP (together with its affiliates,
“Arkhouse”, “we” or “us”), today announced it has submitted an
increased all-cash proposal to acquire Macy’s (“Macy’s”, or the
“Company”) (NYSE: M) for $24.00 per share along with its partner,
Brigade Capital Management (“Brigade”). Arkhouse and Brigade have
also disclosed additional information about their financing,
including identifying Fortress Investment Group LLC (“Fortress”)
and One Investment Management US (“OneIM”) as equity capital
partners for the proposed transaction.
The revised offer represents:
- A 51.3% premium to Macy’s unaffected share price on Nov. 30,
2023, the day prior to Arkhouse and Brigade submitting their
original proposal on Dec. 1, 2023;
- A 33.3% premium to where the Company’s shares closed on March
1, 2024; and
- An increase of 14.3% from Arkhouse and Brigade’s previous offer
of $21.00 per share that was submitted to the Company on Dec. 1,
2023.
Gavriel Kahane and Jonathon Blackwell, Arkhouse Managing
Partners, said:
“We remain frustrated by the delay tactics adopted by Macy’s
Board of Directors (the “Board”) and its continued refusal to
engage with our credible buyer group. Nonetheless, we are steadfast
in our commitment to execute this transaction. In recent months,
Macy’s has introduced two restructurings and a dividend hike. The
stock price selloff following these announcements is a strong
indication of shareholder concern about maintaining the status quo.
We continue to offer the Company an attractive alternative solution
through a sale of the Company at a substantial premium. This would
provide Macy’s stockholders with significant value and immediate
liquidity.
While the restructuring plan Macy’s unveiled last week failed to
inspire investors, the fourth quarter earnings and year-end results
have given us further confidence in the long-term prospects of the
Company if redirected as a private company. After coordinating with
our financing sources, we have increased our offer to $24.00 per
share in cash. We remain open to increasing the purchase price
further subject to the customary due diligence.
The notion that the plan we are proposing is not actionable is
simply not true. We have tried repeatedly to address the concerns
raised by the Company. We clarified the 50% equity contribution we
laid out three months ago and disclosed our partnership with two
highly regarded investors – Fortress and OneIM. With the help of
our advisors, we have identified large global institutional
financing sources for each debt component of the transaction with
strong interest in finalizing commitments during a customary
diligence process. These sources represent 100% of the capital
required to buy the shares in Macy’s we do not already own at our
proposed price of $24.00 per share in cash. We have struggled to
understand what reservations the Board might have at this point and
urge the Company to engage with us in good faith with the goal of
reaching a transaction that would unlock significant value for all
stockholders.
We sincerely hope the members of the Board are not so entrenched
in their views about the future direction of the Company that they
would ignore their fiduciary duties to explore a potential
transaction with a credible buyer. We remain ready to proceed
expeditiously with our due diligence toward a mutually agreeable
transaction to acquire Macy’s at a substantial premium in
cash.”
Advisors
Jefferies LLC is serving as financial advisor and Paul, Weiss,
Rifkind, Wharton & Garrison LLP is serving as transaction
counsel to the bidding group in connection with the proposed
acquisition of Macy’s. Cadwalader, Wickersham & Taft LLP is
serving as legal counsel and Longacre Square Partners is serving as
strategic advisor to Arkhouse. Morrow Sodali is serving as proxy
advisor.
About Arkhouse
Arkhouse is a New York-based investment firm that takes a
private equity approach to investing in the public markets.
Arkhouse focuses on M&A strategies to unlock value dislocations
created by the mispricing of assets across public and private
markets. Arkhouse’s team of professionals consists of real estate
and public equity specialists who have closed more than $25 billion
worth of real estate transactions and have an 18-year shareholder
activism track record.
Cautionary Statement Regarding Forward-Looking
Statements
This press release does not constitute an offer to sell or
solicitation of an offer to buy any of the securities described
herein in any state to any person. The information herein contains
“forward-looking statements”. Specific forward-looking statements
can be identified by the fact that they do not relate strictly to
historical or current facts and include, without limitation, words
such as “may,” “will,” “expects,” “believes,” “anticipates,”
“plans,” “estimates,” “projects,” “potential,” “targets,”
“forecasts,” “seeks,” “could,” “should” or the negative of such
terms or other variations on such terms or comparable terminology.
Similarly, statements that describe our objectives, plans or goals
are forward-looking. Forward-looking statements are subject to
various risks and uncertainties and assumptions. There can be no
assurance that any idea or assumption herein is, or will be proven,
correct or that any of the objectives, plans or goals stated herein
will ultimately be undertaken or achieved. If one or more of such
risks or uncertainties materialize, or if Arkhouse’s underlying
assumptions prove to be incorrect, the actual results may vary
materially from outcomes indicated by these statements.
Accordingly, forward-looking statements should not be regarded as a
representation by Arkhouse that the future plans, estimates or
expectations contemplated will ever be achieved.
Certain Information Concerning the Participants
Arkhouse Value Fund I LP (“Arkhouse Value
Fund I”) and the other Participants (as defined below)
expect to file a preliminary proxy statement and accompanying
universal proxy card with the Securities and Exchange Commission
(the “SEC”) to be used to solicit proxies for, among other matters,
the election of its slate of director nominees to the Board at the
Annual Meeting. Promptly after filing its definitive proxy
statement with the SEC, Arkhouse Value Fund I LP expects to mail
the Participants’ definitive proxy statement and accompanying
universal proxy card to each stockholder entitled to vote at the
Annual Meeting.
The participants in the proxy solicitation are Arkhouse Value
Fund I, Arkhouse Value Fund II LP (“Arkhouse
Value Fund II”, and together with Arkhouse Value Fund I, the
“Arkhouse Value Funds”), Arkhouse
Co-Investment III LP (“Arkhouse Co-Investment
III”), Arkhouse Equity Investors LLC (“Arkhouse Equity Investors”), Arkhouse Equities
Fund LLC (“Arkhouse Equities Fund”,
and together with the Arkhouse Value Funds, Arkhouse Co-Investment
III and Arkhouse Equity Investors, the “Arkhouse Funds”), Arkhouse Value Fund GP LLC
(“Arkhouse Value Fund GP”), Arkhouse
Co-Investment III GP LLC (“Arkhouse
Co-Investment III GP”), Arkhouse Real Estate Activism Fund
MM LLC (“Arkhouse MM”), Arkhouse
Manager LLC (“Arkhouse Manager”),
Arkhouse Management Co. LP (“Arkhouse
Management”), Arkhouse GP LLC (“Arkhouse GP”), Jonathon Blackwell, Gavriel Kahane
and George Hebard (all of the forgoing persons, together, the
“Arkhouse Parties”), along with the
nominees (the “Nominees”) Richard
Clark, Richard L. Markee, Mohsin Y. Meghji, Mitchell Schear, Nadir
Settles, Gerald L. Storch, Sharen J. Turney, Andrea M. Weiss and
Isaac Zion (the Arkhouse Parties and the Nominees, collectively,
the “Participants”).
As of the date hereof, Arkhouse Funds in the aggregate directly
own or have the right to acquire within 60 days 7,829,209 shares of
common stock of Macy’s, par value $0.01 per share (the
“Common Stock”) and hold long
positions in cash-settled American call options referencing a
further 17,014,610 shares of Common Stock, and Mr. Hebard directly
owns or may be deemed to beneficially own a further 146,500 shares
of Common Stock in each case as further detailed below. As of the
date hereof, (i) Arkhouse Value Fund I directly holds 5,947,918
shares of Common Stock, comprised of 1,000 shares of Common Stock
held in record name and 5,946,918 shares of Common Stock held in
“street name”, and holds long positions in cash-settled American
call options referencing a further 15,947,798 shares of Common
Stock; (ii) Arkhouse Value Fund II directly holds 766,436 shares of
Common Stock in “street name”, and holds long positions in
cash-settled American call options referencing a further 1,066,812
shares of Common Stock; (iii) Arkhouse Co-Investment III directly
holds 447,898 shares of Common Stock in “street name”, (iv)
Arkhouse Equity Investors directly holds 70,527 shares of Common
Stock in “street name”; (v) Arkhouse Equities Fund directly holds
416,430 shares of Common Stock in “street name”, and also directly
holds 1,800 American call options currently exercisable for 180,000
shares of Common Stock; (vi) Arkhouse Value Fund GP, as the general
partner of each of the Arkhouse Value Funds, may be deemed to
beneficially own all of the 6,714,354 shares of Common Stock
beneficially owned in aggregate by the Arkhouse Value Funds; (vii)
Arkhouse Co-Investment III GP, as the general partner of Arkhouse
Co-Investment III, may be deemed to beneficially own all of the
447,898 shares of Common Stock beneficially owned by Arkhouse
Co-Investment III; (viii) Arkhouse MM, as the manager of Arkhouse
Equities Fund, may be deemed to beneficially own all of the 596,430
shares of Common Stock (including the 180,000 shares of Common
Stock underlying the 1,800 American call options held by Arkhouse
Equities Fund) beneficially owned by Arkhouse Equities Fund; (ix)
Arkhouse Manager, as the managing member of Arkhouse MM and manager
of Arkhouse Equity Investors, may be deemed to beneficially own all
of the 596,430 shares of Common Stock beneficially owned by
Arkhouse MM and all of the 70,527 shares of Common Stock
beneficially owned by Arkhouse Equity Investors; (x) Arkhouse
Management, as the investment manager to each of the Arkhouse
Funds, may be deemed to beneficially own all of the 7,829,209
shares of Common Stock (including the 180,000 shares of Common
Stock underlying the 1,800 American call options held by Arkhouse
Equities Fund) beneficially owned in aggregate by the Arkhouse
Funds; (xi) Arkhouse GP, as the general partner of Arkhouse
Management, may be deemed to beneficially own all of the 7,829,209
shares of Common Stock (including the 180,000 shares of Common
Stock underlying the 1,800 American call options held by Arkhouse
Equities Fund) beneficially owned in aggregate by Arkhouse
Management; (xii) Mr. Blackwell, as the managing member of Arkhouse
GP, Arkhouse Co-Investment III GP, Arkhouse Value Fund GP and
Arkhouse Manager, may be deemed to beneficially own all of the
7,829,209 shares of Common Stock (including the 180,000 shares of
Common Stock underlying the 1,800 American call options held by
Arkhouse Equities Fund) beneficially owned in aggregate by Arkhouse
GP, Arkhouse Co-Investment III GP, Arkhouse Value Fund GP and
Arkhouse Manager; (xiii) Mr. Kahane, through his status as a member
of Arkhouse GP, Arkhouse Co-Investment III GP, Arkhouse Value Fund
GP and Arkhouse Manager, may be deemed to beneficially own all of
the 7,829,209 shares of Common Stock (including the 180,000 shares
of Common Stock underlying the 1,800 American call options held by
Arkhouse Equities Fund) beneficially owned in aggregate by Arkhouse
GP, Arkhouse Co-Investment III GP, Arkhouse Value Fund GP and
Arkhouse Manager; and (xiv) Mr. Hebard directly holds 140,000
shares of Common Stock in “street name”, and may be deemed to
beneficially own a further 6,500 shares of Common Stock. As of the
date hereof, none of the Nominees own beneficially or of record any
shares of Common Stock.
IMPORTANT INFORMATION AND WHERE TO FIND IT
ARKHOUSE STRONGLY ADVISES ALL STOCKHOLDERS OF MACY’S TO READ
BOTH THE PARTICIPANTS’ PROXY STATEMENT AND MACY’S’ PROXY STATEMENT
AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE
AVAILABLE AT NO CHARGE ON THE SEC’S WEBSITE AT WWW.SEC.GOV. THE
PARTICIPANTS’ DEFINITIVE PROXY STATEMENT, WHEN FILED, AND OTHER
RELEVANT DOCUMENTS, WILL ALSO BE AVAILABLE ON THE SEC WEBSITE, FREE
OF CHARGE. IN ADDITION, THE PARTICIPANTS WILL PROVIDE COPIES OF THE
PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS’ PROXY
SOLICITOR, MORROW SODALI LLC (STOCKHOLDERS CAN CALL TOLL-FREE: +1
(800) 662-5200).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240303699695/en/
For Investors: Morrow Sodali LLC Geoffrey Weinberg / Paul
Schulman / Jonathan Eyl 1 (800) 662-5200
Macys@info.morrowsodali.com
For Arkhouse: Longacre Square Partners Scott Deveau / Joe
Germani arkhouse@longacresquare.com
For Brigade: Josh Clarkson / Kiki O'Keeffe / Anne Hart
Pro-brigade@prosek.com 212-279-3115
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