Macy's, Inc. (NYSE:M) has received a $6.6 billion takeover offer from a consortium of hedge fund firms, whose previous bid was turned down earlier this year.
Arkhouse Management and Brigade Capital Management, now working with Fortress Investment Group and One Investment Management, have bumped up their offer for the department store operator by around $800 million from the $5.8 billion bid made in December, which Macy's rejected in January.
The consortium is offering to pay $24 per share for the Macy’s shares they don’t already own, up from $21 previously. This compares to the closing price of $18.01 on Friday.
Macy's share price leapt 17.6% higher to $21.18 in pre-market trading on Monday.
Bloomingdale's parent company rejected the prior bid from Arkhouse and Brigade because of a “lack of compelling value” as well as concerns about the financing.
Now, the hedge fund pair said today that private equity groups Fortress and One Investment will contribute 50% of the equity portion of the new offer.
The New York-based investment quartet already owns a sizeable stake in Macy's through funds managed by Arkhouse.
Analysts have suggested Macy's real estate portfolio is a key part of the deal, with an estimated value of about $8.5 billion, or $31 per share, including the Macy's flagship store on New York's Herald Square (pictured), calculated to be worth about $3 billion.