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Activist investor Arkhouse to wage proxy contest at Macy's

Macy's logo from outside

Photo: Gary Hershorn/Getty Images

Macy's activist investor Arkhouse Management has nominated nine candidates to the retailer's board of directors, Macy's announced Monday morning.

Why it matters: After the department store chain rejected the activist investor's $5.8 billion offer, Arkhouse weighed going directly to shareholders.

Details: The director nominations follow a Dec. 1 unsolicited non-binding proposal from Arkhouse and Brigade Capital Management, Macy's noted.

  • The retailer reiterated that it studied the offer, but said it deemed it "not actionable" and undervalued the company.
  • It claims that Arkhouse and Brigade still has "yet to provide any financing details that would enhance the actionability of their proposal."
  • Nonetheless, Macy's said it will evaluate Arkhouse's nominees.

Zoom in: In a last-ditch attempt, Arkhouse said via an email that it requested Macy's board to extend the Feb. 19 deadline for director nominations to continue private engagement, but that was also rejected.

  • That forced the activist to nominate directors, it said.
  • Its candidates include former Brookfield Property Group CEO Richard Clark, former Hudon's Bay CEO Gerald Storch, former Victoria's Secret CEO Sharen Turney, former Vitamin Shoppe CEO Richard Markee and Square founder Mitchell Schear.
  • Additional candidates are former Sears and Barney's chief restructuring officer Mohsin Meghji, veteran retail executive Andrea Weiss, Nuveen Real Estate's global head of impact investing Nadir Settles and Acram Group managing principal Isaac Zion.

What they're saying: Macy's, in response, defended its existing board as "diverse, experienced and engaged" with "expertise in areas relevant to Macy's, Inc.'s business, strategy and guiding the company."

  • It plans to share more on a "value-creating strategy" as part of its Q4 and full-year earnings report, it added.

Meanwhile, Arkhouse managing partners Gavriel Kahane and Jonathon Blackwell said in a statement they provided Macy's with additional details regarding their firm's financing, including names of its equity partners with more than $75 billion in combined assets under management, for the 50% equity component.

  • "We also reminded the board that we remain optimistic that we will be able to increase the proposed purchase price based on customary due diligence," they said.

Editor's note: This story was updated with a response from Arkhouse, including the names of its board nominees.

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