Canada's Hudson's Bay Co. has approached Macy's Inc. about a takeover, people familiar with the matter said, as the biggest US department-store chain grapples with disappointing results and restive shareholders.
Cincinnati-based Macy's shares surged in early morning trading, rising more than 7 percent to $32.95 a share, up from Thursday's closing price of $30. 72.
Founded in 1670, Hudson's Bay has been on the acquisition trail in recent years, buying up the Saks Fifth Avenue department store chain in North America and the Galeria Kaufhok chain in Germany. The department store world has been pummeled by a host of major changes in shopping patterns: Much of our spending is moving online, and these businesses have struggled to grab market share in that arena. The paper also said there was no certainty anything would come of these talks.
Both Hudson's Bay (HBC.TO) and Macy's told BNN it does not comment on rumors or speculation. In 2005, when the company was still known as Federated Department Stores, it purchased a rival, May Department Stores, for $11 billion, a deal that created the largest department store company in the United States.
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The company's longtime Chairman and CEO Terry Lundgren is also about to depart the company, handing the reins to Macy's President Jeff Gennette.
On the news, Macy's stock shot up.
A private equity firm said that it has been contacted about a potential sale buy a real estate investor. Already, Macy's has seen major carnage in its stock. The hedge fund had urged Macy's to separate its real estate from its retail business, and to better monetize its real estate assets, which Starboard estimated to be worth $21 billion. Its stock has slumped since.