Hudson's Bay Co. Making Bid To Take Over Macy's
- Author: Eleanor Harrison Feb 04, 2017,
Feb 04, 2017, 0:25
Trading of Macy's stock was briefly halted on Friday after its price shot up unusually quickly, a surge that appears to be fueled by a news report that the retailing giant is in preliminary talks to be acquired by Hudson's Bay, a Canadian department store empire.
The Wall Street Journal, citing an unnamed source, reported that talks between the companies are at an early stage, adding that a deal for Macy's real estate could be a possibility.
The company, which recently closed 68 stores, has a wealth of land and ground leases that it has pondered selling. Both Hudson's Bay (HBC.TO) and Macy's told BNN it does not comment on rumors or speculation. Still, should Hudson's Bay opt to sell some of Macy's less desirable locations, it would have to compete with a flood of properties for sale, as other struggling retailers also shed properties.
While Macy's is an iconic name, and host of New York's annual Thanksgiving Day parade, the department store has been struggling through a turnaround, engineered by Chairman and Chief Executive Officer Terry Lundgren, who assumed the roles in 2004. In January, Macy's said it would slash more than 10,000 jobs and detailed plans to close dozens of stores after another weak holiday-sales season.
"Department stores aren't dying", he said. Starboard Value LP took a stake and called on Macy's to hive off its valuable real estate, which the activist investor says is worth more than $20 billion.
In contrast to Macy's, Saks has opened 2017 with announcements of store openings, including a spate in downtown Greenwich.
But the retail sector has been pressured in recent years by a change in consumer habits.
In July 2015, Starboard made a public presentation that said the stock market wasn't properly valuing the real-estate assets inside Macy's. NRDC then bought Hudson's Bay in 2008. After buying Saks for $2.9 billion in 2013, it secured a $1.25 billion 20-year mortgage for its Fifth Avenue flagship location in NY, valuing the property at $3.7 billion. The joint ventures, which would scout for worldwide opportunities, was another move by HBC to bring value to its lucrative real estate assets portfolio.