Macy's Receives Takeover Approach From Hudson's Bay -- Update
February 03 2017 - 11:09AM
Dow Jones News
By Dana Mattioli, Suzanne Kapner and David Benoit
Canada's Hudson's Bay Co. has approached Macy's Inc. about a
takeover, people familiar with the matter said, as the biggest U.S.
department-store chain grapples with disappointing results and
restive shareholders.
Talks between the companies are at a preliminary stage and also
encompass other ways they could cooperate, one of the people said,
adding that a deal for Macy's real estate is also a possibility.
Other details of the talks are unclear and it's far from guaranteed
there will be any deal.
Shares of Macy's jumped 7.4% to $33 in morning trading.
Hudson's Bay is an acquisition-hungry owner of marquee names in
retail including Lord & Taylor department stores and Saks Fifth
Avenue. While its market value is dwarfed by that of Macy's -- $1.8
billion compared with $9.8 billion as of Friday morning -- Hudson's
Bay could raise equity and debt against its real estate portfolio,
which could be worth $14 billion, one of the people said. It could
also bring in a partner.
But complicating a takeover, Macy's is saddled with about $7.5
billion in debt.
Macy's has struggled in recent years amid increasing competition
from upstarts and as shopping habits change and consumers buy more
over the internet. Its stock has fallen more than 50% from the
highest level it reached in 2015. In January, Macy's said it would
slash more than 10,000 jobs and detailed plans to close dozens of
stores after another weak holiday-sales season. It's facing
mounting investor pressure to turn around its performance and
reverse the stock drop. Starboard Value LP took a stake and called
on Macy's to hive off its valuable real estate, which the activist
investor says is worth more than $20 billion. Macy's later added a
Starboard ally to its board.
Macy's in June said its longtime chief executive, Terry
Lundgren, would step down later this year and hand the reins to one
of his top lieutenants, current President Jeff Gennette.
Write to Dana Mattioli at dana.mattioli@wsj.com, Suzanne Kapner
at Suzanne.Kapner@wsj.com and David Benoit at
david.benoit@wsj.com
(END) Dow Jones Newswires
February 03, 2017 10:54 ET (15:54 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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