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Macy’s Inc.’s shares climbed 15.4% Monday, and its high-yield bonds rallied along with them, after an investor group seeking to take over the department-store chain sweetened its bid by roughly $800 million.

Arkhouse Management and Brigade Capital raised their bid for the company to $24 a share, or about $6.6 billion, from $21 a share, or about $5.8 billion. The Macy’s board rejected the earlier offer in January, saying at the time that it lacked “compelling value.”

Trading volume of 12.1 million shares by early afternoon exceeded the stock’s
average daily volume of 10.4 million over the past 65 days.

Arkhouse and Brigade said their new offer is a 51.3% premium to Macy’s share price as of Nov. 30, 2023, when they submitted their original proposal. They noted that it’s a 33% premium to Macy’s stock price as of Friday, when it closed at $18.01 a share.

“We remain frustrated by the delay tactics adopted by Macy’s Board of Directors and its continued refusal to engage with our credible buyer group,” Arkhouse managing partners Gavriel Kahane and Jonathon Blackwell said in a statement. “Nonetheless, we are steadfast in our commitment to execute this transaction.”

The company’s bonds rallied Monday, as the following chart from data solutions company BondCliQ Media Services shows. At these prices, the bond are yielding between 6.50% and 6.75%.

The two-week price performance of Macy’s most active bonds.

BondCliQ Media Services

The bonds have seen net buying on the day so far.

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Macy’s bonds’ intraday net customer flow.

BondCliQ Media Services

Macy’s has about $3.2 billion of debt, according to FactSet. The bulk of its bonds mature in 2034.

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Macy’s Inc.’s outstanding debt by maturity year.

BondCliQ Media Services

In a statement Sunday, Macy’s confirmed it had received the offer and said it would “carefully review and evaluate the latest proposal consistent with the board’s fiduciary duties and in consultation with its financial and legal advisors.” A Macy’s spokesperson said there was no additional comment.

Macy’s announced a restructuring plan last week that includes closing 150 stores, including its iconic flagship store in downtown San Francisco. Separately, the company also announced fourth-quarter earnings that beat expectations.

The stock has fallen 8% in the last 12 months, while the S&P 500
has gained 27%.

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