Macy’s Refuses a $5.8 Billion Buyout

Macy’s, the U.S. retailer, recently gave the cold shoulder to a $5.8 billion buyout bid. The suitors, investment firms Arkhouse Management and Brigade Capital Management, were left high and dry as their ambitious offer lacked strong financial backing, according to Macy’s.

“Following careful consideration and efforts to gather additional information from Arkhouse and Brigade, the board determined that Arkhouse and Brigade’s proposal is not actionable and that it fails to provide compelling value to Macy’s, Inc. shareholders,” outgoing chairman and CEO of Macy’s, Jeff Gennette, said in a statement. “We continue to be open to opportunities that are in the best interests of the company and all of our shareholders.”

This recent development has left the future shape of Macy’s up in the air and has sparked speculation about the potential impacts on the company’s business and its partnerships.

Jan Kniffen, a retail industry expert and CEO of J Rogers Kniffen WorldWide, threw light on the matter alongside Yahoo Finance Reporter Brooke DiPalma. Kniffen stressed the importance of Macy’s remaining a functional company, maintaining its current operations and trajectory despite the rejected offer.

The retail expert reasoned that Macy’s wholesale partners’ ability to sell to the company wouldn’t be affected. The real concern, however, is the number of stores that Macy’s keeps operational in order to distribute their products effectively.

Kniffen points to the collapse of Sears as an example of what Macy’s partners would not want to see happen again. Sears quickly went under after a buyout, which led to a near-total wipeout of the company, leaving its partners with no alternative outlets for their products.

Macy’s plays a crucial role in the retail industry, being one of the major players with few competitors of similar scale. The company’s survival and success are pivotal to the structure of its vendors.