An investor consortium has tabled a $5.8 billion bid to acquire Macy's Inc. (NYSE:M), in an attempt to privatize the iconic department store chain. This comes as Macy's grapples with mounting competition from digital retailers, which has significantly eroded its market value.

As per The Wall Street Journal, Arkhouse Management, a real estate-oriented investment firm, and Brigade Capital Management, a global asset manager, submitted a proposal on Dec. 1 to buy the Macy's shares they don't currently possess for $21 per share.

This proposed price signifies a roughly 32% premium to where shares settled the day prior to the proposal. Despite a recent surge, Macy's shares closed Friday at $17.39, significantly below the $70 per share level seen in 2015 before the onslaught of digital competition.

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The investor group, which believes that Macy's is undervalued in public markets, has shown readiness to increase its offer pending due diligence. A supporting letter from an investment bank vouches for the group's ability to secure necessary financing for the deal.

Macy's, which owns approximately 500 department stores under its name, including Bloomingdale's and Bluemercury, generated approximately $1.2 billion in profits on $24.4 billion in revenue last fiscal year. This shows a slight decrease from the $1.4 billion in profits on $24.5 billion in revenue recorded in 2021.

In the past, Macy's has been the target of a potential takeover and has also attracted the interest of shareholder activists, particularly focusing on the company's real estate assets.

The company, under the leadership of CEO Jeff Gennette, who is slated to retire next year, has been implementing a turnaround strategy that includes closing underperforming locations, launching new brands, and modernizing its supply chain.

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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