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Macy's and Arkhouse make peace

Entrance to Macy's department store, covered in flowers.

Photo: Noam Galai/Getty Images for Macy's

In the end, Macy's and Arkhouse Management chose peace, as the activist shareholder continues due diligence on its offer to buy the department store chain.

Why it matters: It clears the way for potentially friendlier buyout negotiations.

The latest: Macy's will add two of Arkhouse's nominees to its board, while Arkhouse will withdraw the rest.

  • And Macy's will continue to engage with Arkhouse and its partner Brigade Capital Management about a takeover.

💭 Thought bubble: This is a binary situation. Either deal negotiations are progressing to Arkhouse's satisfaction, or the activist realized how daunting it could be to convince investors and reach a deal.

Between the lines: Arkhouse loses some leverage by dropping its proxy fight, which included nominating an impressive slate of highly qualified board candidates that would have been tempting to shareholders based on their merit.

Yes, but: Getting Macy's to settle and add two of its nominees to the board gets the activist inside the room.

Reality check: Arkhouse said its aim was for Macy's to engage and allow it to conduct due diligence, and it achieved that.

Catch up quick: Late last year Macy's received a buyout offer from Arkhouse and Brigade Capital Management.

  • To put pressure on the retailer to engage, in late February the activist nominated a slate of directors, with shareholders scheduled to vote on May 17.

By the numbers: Macy's stock dipped to a low of $19.10 per share in Wednesday morning trading after the announcement, but it has since recovered and is trading near $19.65.

What we're watching: The coming weeks will reveal whether Arkhouse's bid to buy Macy's was ever a realistic proposition.

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