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Macy's settles proxy battle with activist Ark House, adds two board members

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

Scott Mullin | CNBC

Macy's announced Wednesday that it has settled a proxy battle with real estate investment company Ark House and appointed two of the company's candidates to its 15-member board of directors.

Ric Clark and Rick Markee will join Macy's Board of Directors effective immediately. They will be part of a committee tasked with overseeing and evaluating Ark House's bid to take the department store private and recommending the proposed acquisition to the board.

“The appointment of Mr. Clark and Mr. Markey to our Board and Finance Committee will task them with considering our proposals and alternative transactions, and will ensure that our discussions remain constructive and that our proposals are taken seriously.” and will be guaranteed to be dealt with promptly,” said the Managing Partner of Ark House. Jonathan Blackwell and Gabriel Kahane said: “We appreciate the board’s involvement and look forward to working with them to unlock shareholder value.”

Mr. Clark has spent nearly 40 years in the real estate industry and previously served as Chairman and CEO of Brookfield Property Group, Brookfield Property Partners, and Brookfield Office Properties.Mr. Markey brings retail acumen to Macy's board: He previously served as CEO of The Vitamin Shoppe and currently serves on the discount retailer's board of directors. Five Below.

Macy's stock fell slightly in intraday trading Wednesday.

The personnel changes come as Ark House moves forward with efforts to take the 165-year-old department store private, a deal that Macy's had previously resisted.

As the two sides continued to negotiate the terms of the sale, the department store provided confidential business information to a group of investors led by Ark House.

Macy's said in a statement: “The board is open-minded about the best path to creating shareholder value and is committed to continuing to take actions we believe are in the best interests of our company and all Macy's stockholders.” said.

ark house submitted an offer first The investors are working with Brigade Management, which has since increased its offer multiple times.From investment company to activist He then began a proxy fight. He was appointed to the company in February and established a nine-member board of directors.

The storied retailer is struggling to maintain market share. Intensifying competition From retailers like TJX companiesowner of TJ Maxx, and the goal. As brands move away from wholesalers and try to drive sales through their own websites and stores, department stores will have to work harder to differentiate themselves and attract customers.

Macy's announced in February that it would. It ends around 150 In just a few weeks since CEO Tony Spring took the top job, the company's roughly 500 stores have was fired In recent years there are thousands of workers.

real estate interest

Macy's has attracted the attention of activists before. Starboard Value, a well-established investor in the sector, got into the retailer in 2015 but sold it two years later after a potential acquisition fell through.

Ark House's bid is different from the company's past bids. Real estate investors are looking to take their companies private, remove them from the competitive public market, and monetize their real estate assets.

According to a report in March, Arkhouse, in a meeting with retail analysts from JPMorgan, said it believed the value of real estate owned by the department store was higher than the company's current corporate value, and that Arkhouse was considering Macy's as a “retail business.” The company considers the company to be an “adjacent real estate company.” Research notes.

“The key features outlined in Ark House's paper focus on improving Macy's fundamental creditworthiness as a tenant, driven by EBITDA dollar growth as a private company, and as a real estate operator. ”, the research notes state.

“To be clear, Ark House does not intend to sell Macy's real estate assets in the short term, but rather owns the assets and monetizes them through financing (rather than an outright asset sale) and We intend to provide cash to give back and reinvest in the business.”

In a subsequent meeting with Macy's executives, CEO Tony Spring disagreed with Arkhouse's view.

“We do not consider ourselves primarily a real estate company and believe that all decisions should be considered from a real estate perspective,” Spring said, according to a JPMorgan research note.

The company believes its current turnaround plan will accelerate same-store sales growth and overtime, putting Macy's store fleet in a healthier position for long-term growth.

Summarize this content to 100 words Macy's flagship store in Herald Square, New York, December 23, 2021.Scott Mullin | CNBCMacy's announced Wednesday that it has settled a proxy battle with real estate investment company Ark House and appointed two of the company's candidates to its 15-member board of directors.Ric Clark and Rick Markee will join Macy's Board of Directors effective immediately. They will be part of a committee tasked with overseeing and evaluating Ark House's bid to take the department store private and recommending the proposed acquisition to the board. “The appointment of Mr. Clark and Mr. Markey to our Board and Finance Committee will task them with considering our proposals and alternative transactions, and will ensure that our discussions remain constructive and that our proposals are taken seriously.” and will be guaranteed to be dealt with promptly,” said the Managing Partner of Ark House. Jonathan Blackwell and Gabriel Kahane said: “We appreciate the board’s involvement and look forward to working with them to unlock shareholder value.”Mr. Clark has spent nearly 40 years in the real estate industry and previously served as Chairman and CEO of Brookfield Property Group, Brookfield Property Partners, and Brookfield Office Properties.Mr. Markey brings retail acumen to Macy's board: He previously served as CEO of The Vitamin Shoppe and currently serves on the discount retailer's board of directors. Five Below.Macy's stock fell slightly in intraday trading Wednesday.The personnel changes come as Ark House moves forward with efforts to take the 165-year-old department store private, a deal that Macy's had previously resisted. As the two sides continued to negotiate the terms of the sale, the department store provided confidential business information to a group of investors led by Ark House. Macy's said in a statement: “The board is open-minded about the best path to creating shareholder value and is committed to continuing to take actions we believe are in the best interests of our company and all Macy's stockholders.” said. ark house submitted an offer first The investors are working with Brigade Management, which has since increased its offer multiple times.From investment company to activist He then began a proxy fight. He was appointed to the company in February and established a nine-member board of directors.The storied retailer is struggling to maintain market share. Intensifying competition From retailers like TJX companiesowner of TJ Maxx, and the goal. As brands move away from wholesalers and try to drive sales through their own websites and stores, department stores will have to work harder to differentiate themselves and attract customers. Macy's announced in February that it would. It ends around 150 In just a few weeks since CEO Tony Spring took the top job, the company's roughly 500 stores have was fired In recent years there are thousands of workers. real estate interestMacy's has attracted the attention of activists before. Starboard Value, a well-established investor in the sector, got into the retailer in 2015 but sold it two years later after a potential acquisition fell through.Ark House's bid is different from the company's past bids. Real estate investors are looking to take their companies private, remove them from the competitive public market, and monetize their real estate assets. According to a report in March, Arkhouse, in a meeting with retail analysts from JPMorgan, said it believed the value of real estate owned by the department store was higher than the company's current corporate value, and that Arkhouse was considering Macy's as a “retail business.” The company considers the company to be an “adjacent real estate company.” Research notes. “The key features outlined in Ark House's paper focus on improving Macy's fundamental creditworthiness as a tenant, driven by EBITDA dollar growth as a private company, and as a real estate operator. ”, the research notes state. “To be clear, Ark House does not intend to sell Macy's real estate assets in the short term, but rather owns the assets and monetizes them through financing (rather than an outright asset sale) and We intend to provide cash to give back and reinvest in the business.”In a subsequent meeting with Macy's executives, CEO Tony Spring disagreed with Arkhouse's view. “We do not consider ourselves primarily a real estate company and believe that all decisions should be considered from a real estate perspective,” Spring said, according to a JPMorgan research note. The company believes its current turnaround plan will accelerate same-store sales growth and overtime, putting Macy's store fleet in a healthier position for long-term growth.
https://www.cnbc.com/2024/04/10/macys-settles-proxy-fight-with-activist-arkhouse-adds-two-directors.html Macy's settles proxy battle with activist Ark House, adds two board members

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