Home Business Macy's reaches agreement with activist Arkhouse and adds two directors

Macy's reaches agreement with activist Arkhouse and adds two directors

by SuperiorInvest

Macy's flagship store in Herald Square in New York, December 23, 2021.

Scott Mlyn | CNBC

department store Macy's On Wednesday it said it had resolved its proxy dispute with property investor Arkhouse and would add two new directors to its 15-person board.

The reorganization brings Macy's closer to a deal that could take the 165-year-old department store private.

Former Brookfield executive Ric Clark and Rick Markee will join Macy's board of directors effective immediately. Markee also sits on the discount retailer's board of directors. Five down. Both Clark and Markee were nominated for Arkhouse.

“The Board is open-minded about the best path to create value for shareholders,” the company said.

Macy's shares fell about 2% in early trading Wednesday.

Macy's also said it had provided the Arkhouse-led investment group with confidential business information as the two sides negotiated the terms of a potential sale. Both new directors will sit on the committee that will review Arkhouse's bid to buy the company.

Arkhouse first submitted a bid to take the retailer private in 2023. Since then, the investor, working in collaboration with Brigade Management, has increased its offer several times. The investment firm-turned-activist then launched a proxy fight at the company in February, putting forward a slate of nine directors.

The appointment of Clark and Markee “will ensure that our discussions continue to be constructive and that our proposal is treated seriously and expeditiously,” said Arkhouse managing partners Jonathon Blackwell and Gavriel Kahane.

The storied retailer has struggled for nearly a decade as consumers have quickly shifted to online shopping and away from department stores. Macy's said in February it would close about 150 of its roughly 500 stores, just weeks after CEO Tony Spring took the top job.

It has laid off thousands of people in recent years as the company grapples with a dramatically altered landscape.

Macy's has attracted the attention of activists before. Starboard Value, a well-established investor in the space, took a position in the retailer in 2015, only to sell it two years later after a potential acquisition fell through.

Arkhouse's offer differs from previous commitments at the company. The real estate investor is seeking to privatize the company, removing it from the rigors of the public market and giving executives time to rationalize and resize the business, which still has a significant real estate portfolio.

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