Canada's Hudson's Bay Co. has approached Macy's Inc. about a takeover, people familiar with the matter said, as the biggest USA department-store chain grapples with disappointing results and restive shareholders.
But now, things could be changing, because Macy's stock surged more than five percent on Thursday.
Macy's shares were up 6.45% to $32.70 in mid-day trading.
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.
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Last month, Macy's announced it would shutter 68 stores and slash 10,100 jobs as it struggles to adjust to an evolving retail landscape in which consumers increasingly bypass malls to shop online, or gravitate toward fast-fashion favorites like Zara and H&M. The report said the talks were still in early stages and may not lead to a deal.
A representative for Hudson's Bay also declined comment. Hudson's Bay, meanwhile, acquired Saks Fifth Avenue back in 2013 for $2.4 billion. Ahead of this latest rumor, Macy's market capitalization was almost $10 billion, while Hudson's Bay was about $1.7 billion. Outgoing CEO Terry Lundgren had allegedly been working to prevent significant disruptions in the company's board while fielding several acquisition offers. He wants the company to focus more on its real estate value. The company bought German chain Kaufhof for 2.8 billion euros ($3.02 billion) in 2015.
The retailer has been under pressure from activist investors displeased with its stock performance to sell of its stores into a real estate investment trust or look at ways of wringing out money from its physical assets. Already, Macy's has seen major carnage in its stock.
Since Smith's July 2015 purchase, shares of Macy's have cratered by almost 60%.