Activist investor discloses stake in Macy's (M.US) as shares languish
1min read U.S. media reports that Barington Capital, a well-known activist shareholder in the U.S., has invested heavily in Macy's (M.US), a major player in the U.S. retail industry, and is pushing for significant changes at the U.S. department store. However, the sources quoted by the media did not reveal Barington Capital's specific Macy's holdings.
The activist shareholder is eager to see Macy's management reduce overall spending levels and is also considering separating the company's real estate division from the rest of the business, as well as considering all options, including selling or spinning off the Bloomingdale's and Bluemercury chains, the sources said.
Barington Capital Group believes Macy's real estate is worth between $5 billion and $9 billion, according to the sources. The famous activist shareholder was founded by James Mitarotonda in January 2000. The company adopts a "value-oriented" core investment strategy, focusing on identifying and investing in undervalued U.S. listed companies, mainly in the U.S. consumer, retail, and industrial sectors.
Benefiting from Barington Capital's purchase of the stock, Macy's shares rose more than 4% in pre-market trading on Monday to $17.17, while Macy's 52-week price range is $14.06 to $22.10. Macy's shares have fallen 15% this year, lagging the S&P 500 index, which has risen more than 27%.
Generally speaking, the core strategy of activist shareholders is to buy a large amount of shares in the target company in the secondary market and then push the company to release a large amount of shareholder value by proposing transformative suggestions. The ways that activist shareholders promote the target company to enhance shareholder value mainly include promoting the company to improve operational efficiency, divest non-core assets, optimize capital structure, and enhance shareholder returns (such as increasing dividend payouts and stock repurchases), so the stock price of the listed company often surges after the activist shareholder publicly discloses its holdings.
