Published: Sat, February 04, 2017
Research | By Kayla Price

This Could Be a Turnaround for Macy's Stock

This Could Be a Turnaround for Macy's Stock

Canadian-based Hudson Bay is reportedly in talks to acquire USA department store chain Macy's.

Hudson's Bay shares rose as high as $10.62 on the TSX before pulling back to trade at $10.24, up 23 cents, or more than two per cent, from Thursday's close.

Macy's, with corporate offices in Cincinnati and NY, saw its stock soar Friday morning upon hearing the news.

The deal, which is in preliminary discussions, could involve a sale of all Macy's assets or just a deal for the company's real estate.

A deal would add another retailer to Hudson Bay's expanding portfolio, which includes Saks Fifth Avenue and Lord & Taylor in the United States, as well as Galeria Kaufhof in Europe.

Department store sales suffered in the latest holiday season as shoppers increased the number of items they bought online.

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Representatives for Hudson's Bay and Macy's declined to comment. Lundgren is retiring as CEO later in this quarter, and previously wasn't planning on selling the company. Ahead of this latest rumor, Macy's market capitalization was almost $10 billion, while Hudson's Bay was about $1.7 billion.

Founded in 1670, Hudson's Bay began as a fur trading business and once owned more than 40 percent of what is now Canada.

Reuters reports that Macy's investors have pushed the company to sell its real estate, or at the very least, separate its retail business from its real estate.

The Canadian retailer was acquired in 2008 by NRDC Equity Partners, headed by Richard Baker.

Since Smith's July 2015 purchase, shares of Macy's have cratered by almost 60%.

Activist investor Starboard Value held around 1 percent of Macy's stock as of September 30 a year ago, making it the company's 15th largest shareholder.

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