The department store operator Macy’s (NYSE:M) turned down the $5.8 billion buyout bid from an investor group led by Arkhouse Management and Brigade Capital Management. Macy’s rejected the proposal, citing a “lack of compelling value” and expressing concerns about Arkhouse and Brigades’ capacity to finance the proposed transaction.
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The group privately made a proposal to acquire the company for $21 per share in cash on December 1, 2023. The proposed purchase price represented a 33.5% premium from its closing price of $15.73 on November 30. Moreover, it reflected a 56.8% premium to the company’s 30-day volume-weighted adjusted stock price as of November 30, 2023.
Despite this premium, Jeff Gennette, CEO of Macy’s, said that after a thorough evaluation of the acquisition offer, the Board has concluded that their proposal is not feasible and lacks compelling value for Macy’s shareholders.
Investor Group Keen to Acquire Macy’s
Before Macy’s declined the offer, the investor group said they were keen on finalizing the acquisition and would take all essential measures, including direct engagement with stockholders.
They also indicated the potential for a substantial increase in their initial proposal if they are granted access to conduct the necessary due diligence.
Against this backdrop, let’s look at what the Street recommends for Macy’s stock.
What is the Forecast for Macy’s Stock?
Macy’s has struggled to drive its top line in 2023 due to the challenging macroeconomic conditions. Moreover, the company’s EPS is under pressure, and its stock has lost over 21% of its value in one year.
While the company is taking measures to stimulate growth, Wall Street remains sidelined on the stock. Macy’s stock has a Hold consensus rating with four Buy, five Hold, and two Sell recommendations. Analysts’ average price target of $17.10 implies 3% downside potential from current levels.
