Wise Alpha noticed that shares of Macy's(M.US) fell nearly 15% in early Monday trading after the company said it had ended negotiations with Arkhouse Management and Brigade Capital Management to buy the department store.
The investor consortium had offered to buy the remaining Macy's shares at $24.80 per share ($6.6 billion), which was higher than the $21 per share offer made in December and the $24 per share increase in March. The offer was valued at about $6.9 billion.
Macy's said in a statement that its board "unanimously decided to terminate discussions with Arkhouse and Brigade because they were unable to propose a viable proposal and to secure financing at a compelling value."
After seven months of negotiations, Macy's had "broad" due diligence requirements for Arkhouse and Brigade and allowed the release of information about reliable financing sources. In May, all parties agreed to a timeline that required Arkhouse and Brigade to submit a fully funded and viable proposal.
Macy's formally requested Arkhouse and Brigade to provide their best and final offer for the acquisition by June 25, 2024, and to commit to a full negotiation of all debt and equity financing needed.
However, on June 26, Arkhouse and Brigade submitted a "notice" letter expressing their interest in buying all outstanding shares at $24.80 per share, which Macy's had previously deemed "not compelling," and the financing documents were not sufficient.
With the acquisition plan cancelled, Macy's is focusing on creating shareholder value through its "bold chapter" strategy to accelerate the growth of its luxury business and modernize its end-to-end business.