Macy’s flagship store in Herald Square in Latest York, Dec. 23, 2021.
Scott Mlyn | CNBC
Department store Macy’s on Wednesday said it had settled its proxy fight with real estate investor Arkhouse, and that it could add two latest directors to its 15-person board.
The reshuffle moves Macy’s closer to a deal that might take the 165-year-old department store private.
Ric Clark, a former executive at Brookfield, and Rick Markee will join Macy’s board effective immediately. Markee can be on the board of discount retailer Five Below. Each Clark and Markee were Arkhouse nominees.
“The Board is open-minded about the perfect path to create shareholder value,” the corporate said.
Macy’s shares fell around 2% in early trading Wednesday.
Macy’s also said it had provided the Arkhouse-led investor group with confidential business information because the two sides negotiated the terms of a possible sale. Each latest directors will likely be a part of the committee reviewing Arkhouse’s bid to purchase the corporate.
Arkhouse first submitted a suggestion to take the retailer private in 2023. The investor, which is working in concert with Brigade Management, has since increased its offer multiple times. The investment-firm-turned-activist then launched a proxy fight at the corporate in February, putting up a nine-director slate.
Clark and Markee’s appointment “will be certain that our discussions proceed to be constructive and that our proposal is treated seriously and expeditiously,” Arkhouse managing partners Jonathon Blackwell and Gavriel Kahane said.
The storied retailer has struggled for nearly a decade as consumers have rapidly swung to online shopping and away from shops. Macy’s said in February that it could close around 150 of its roughly 500 stores, just weeks after CEO Tony Spring stepped into the highest job.
It has laid off hundreds of individuals lately as the corporate grapples with the dramatically altered landscape.
Macy’s has attracted activist attention before. Starboard Value, a well-established investor within the space, took a position within the retailer in 2015, only to sell it off two years later after a possible acquisition fizzled.
Arkhouse’s bid differs from past engagements at the corporate. The actual estate investor seeks to take the corporate private, removing it from the trials of the general public market and allowing executives time to streamline and rightsize the business, which still has a major real estate portfolio.
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