Hudson Bay Co makes takeover approach for Macy's Inc: report
04 February 2017
Hudson's Bay Co has made a takeover approach for struggling retailer Macy's Inc, according to people familiar with the matter, as it looked to push further into the US market where it already owned the Lord & Taylor and Saks Fifth Avenue chains, Reuters reported.
While the Toronto-based company faced major financing and operating challenges as it looked to complete the acquisition, it could use its existing foothold in the US to save on administrative costs and have more negotiating power with its vendors, according to commentators.
Shares of Macy's closed up 6.4 per cent at $32.69 yesterday while Hudson's Bay's shares were up to C$10.39.
According to one person, talks between the companies were at an early stage. The sources asked not to be identified because the negotiations were confidential.
Macy's, the host of New York's annual Thanksgiving Day parade, is in the midst of a turnaround initiated by chairman and chief executive officer Terry Lundgren, who took over reins of the company in 2004.
Lundgren who will step down this year, could earn $80.24 million if there was a change of company control, according to a filing.
Macy's had also come under pressure from hedge fund Starboard Value LP since 2015 to separate its real estate from its retail business to better monetise its real estate assets. According to Starboard's estimates those assets would be worth $21 billion.
Questions about the future of Macy's had been swirling for some time, and had intensified in recent weeks.
According to The New York Post, which reported Thursday that long-time CEO Terry Lundgren, who would be stepping down later this year, might look to sell the company before his term as CEO was up.
Macy's last month, announced plans to close 68 stores and cut over 10,000 jobs following disappointing sales during the holidays.