Arkhouse has the necessary financing to take on Macy's private with a $5.8 billion offering, managing partner Gavriel Kahane told CNBC on Thursday, but the activist investor has run into roadblocks without the department store retailer's cooperation in due diligence.
“Right now, according to public information, there is no bank in the world that will provide you with committed financing, and that is normal,” Kahane said on CNBC's “Money Movers.” He added that management's response in the coming days and weeks will determine how Arkhouse moves forward.
Arkhouse has previously said it would take “all necessary steps” to acquire Macy's, including going directly to shareholders.
Arkhouse and Kahane's Brigade Capital submitted an unsolicited offer to Macy's management in December to take the company private at $21 per share, a premium of more than 32%. Investment bank Jefferies has provided a high confidence letter, Arkhouse previously said, meaning the bank believes the two companies will be able to raise the capital needed to close the deal.
Arkhouse also said it could raise its offer above the original offer of $21 per share, but only if Macy's management was willing to sign a mutual confidentiality agreement and allow the due diligence to begin.
Macy's board of directors rejected that offer Sunday, saying in part that it believes it is “highly unlikely” that Arkhouse and Brigade's proposed financing “can be successfully executed.” It also refused to enter into a confidentiality agreement or allow the proceedings to proceed, with CEO and President Jeff Gennette saying in a letter to Arkhouse and Brigade that “such an exercise would unnecessarily distract our management team.”
