Amazon Bids $38 A Share For Macy’s: Offer Rejected
While the world has been quibbling about Macy’s performance on the High Street, or as our American cousins prefer to call it, Main Street, it would appear that for arguably the world’s best retailer, such minor considerations are not important.
The rumour which I have just published a few minutes ago in my Yahoo Finance column is that Amazon has Macy’s in its sights, and of course surprisingly soon after the deal for Whole Foods (WFM), which also took the market by surprise. More information is at Yahoo. Clearly, even for the powers that be at Amazon, it was cheaper to buy the company than shop there!
However, in the case of Macy’s we are looking at a different situation in the sense that it is a company with a massive real estate portfolio, but where the the “day job” is sinking the valuation. The premise is that the current market value of $7bn is a third of the real estate portfolio, with Amazon getting a real world retailer and its vast network for free.
The conclusion therefore after the alleged $38 a share rejection is that a higher offer should be forthcoming, if not from Amazon, plenty of other contenders once this story is revealed. Indeed, with a 6% dividend and store closures mooted to cut costs, Macy’s is a classic value play – as has been pointed out in many other places, with or without the speculative intrigue.