As the company considers investor interest in a buyout, Macy’s announced that it had received notice from Arkhouse Management Co. about its nomination of directors to the retailer’s board.
Arkhouse is nominating nine board of director candidates to stand for election to the Macy’s board of directors at the company’s 2024 annual meeting.
In response, Macy’s issued a statement:
Macy’s, Inc. has a diverse, experienced and engaged board who collectively bring expertise in areas relevant to Macy’s, Inc.’s business, strategy and guiding the company in creating shareholder value. Our board of directors and management team are open to value creation opportunities, and we have a proven track record of evaluating a broad range of options with that objective in mind.
Over the past year as part of our leadership succession plan, our board, together with our management team, has taken a critical look across all aspects of our business to develop a forward-looking strategy that leverages our strengths, heritage and previous investments with a focus on customer experience across omnichannel nameplates and platforms. We look forward to sharing more on this value-creating strategy as part of our fourth quarter and full year 2023 earnings report.
In addition to the director nominations, Macy’s addressed the Arkhouse unsolicited, non-binding proposal made with Brigade to acquire all of the retailer’s outstanding stock for $21 per share in cash. The company stated it has reviewed the proposal and noted:
Given concerns by the board and our advisors about Arkhouse and Brigade’s ability to successfully execute the financing plan included with their proposal, we requested additional information, but such limited additional information provided by Arkhouse, Brigade and their financial advisor failed to address the board’s concerns.
Ultimately, the board determined that the proposal was not actionable and lacked compelling value.
Subsequently, and in keeping with the board and management team’s openness to considering opportunities to enhance shareholder value, we directed our financial advisors to engage again with Arkhouse and Brigade’s financial advisor. The purpose of our outreach was to provide further clarity for Arkhouse and Brigade regarding the types of additional financing information they could provide to potentially advance discussions with the board.
Rather than make any attempt to provide additional information, Arkhouse instead sent a letter to our board on Sunday, February 11, 2024, requesting we extend our director nomination window by 10 days and claiming inaccurately that they had responded to any outstanding issues.
Arkhouse and Brigade have yet to provide any financing details that would enhance the actionability of their proposal despite multiple opportunities to do so, and instead of attempting a constructive dialogue, Arkhouse has chosen to launch a proxy contest.
Macy’s maintained that its board would present recommendations regarding the election of directors in the company’s proxy statement, which will be filed with the United States Securities and Exchange Commission ahead of the company’s 2024 annual meeting. Macy’s has yet to set a date for the meeting.
In the Bloomberg interview, as related in a filing with the SEC, Kahane noted that the investment group had nominated its candidates for the board to gain a majority position, which would require eight being elected, complaining of Macy’s failure to provide information it requested. Kahane asserted that shareholders need not worry about the group’s plans for the company because its proposal would provide them with a profit. He continued by saying Macy’s holds a substantial amount of real estate on the company balance sheet and that it has just done an abysmal job at realizing a return on behalf of shareholders. Kahane added that the investment group outlook includes potentially closing some stores but the main thrust is to realize the real estate value on the balance sheet as well as, through the buyout, better position the company for success outside public ownership.
