Arkhouse has the financing in place to take Macy’s private at a bid of $5.8 billion, managing partner Gavriel Kahane told CNBC Thursday, but the activist investor has run into roadblocks without the department store retailer’s cooperation on due diligence.
“At this stage, based on public information, there isn’t a bank in the world that would give you committed financing, and that’s just par for the course,” Kahane said on CNBC’s “Money Movers.” He added that management’s response in the coming days and weeks would determine how Arkhouse moved forward.
Arkhouse has previously said it would take “all necessary steps” to acquire Macy’s, including going directly to shareholders.
Kahane’s Arkhouse and Brigade Capital submitted an unsolicited bid to Macy’s management in December to take the company private at $21 a share, a premium of more than 32%. Investment bank Jefferies has provided a highly confident letter, Arkhouse has previously said, meaning the bank believes the two firms will be able to raise the capital necessary to close the deal.
Arkhouse also said it could raise its bid above the original $21-per-share offer, but only if the Macy’s management was willing to sign a mutual non-disclosure agreement and permit diligence to begin.
Macy’s board rejected that offer on Sunday, saying in part that it believes it is “highly unlikely” Arkhouse and Brigade’s proposed financing “could be successfully executed.” It also refused to enter into a non-disclosure agreement or permit diligence to move forward, with CEO and chair Jeff Gennette saying in a letter to Arkhouse and Brigade that “such an exercise would unnecessarily distract our management team.”