Saks Owner Hudson's Bay Makes Takeover Approach to Macy's

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Shares of Macy's are up 7.91% on huge volume and reached an intra-day high of $34.37. Before its stock spiked on news of the deal, Macy's market capitalization was almost $10 billion, while Hudson's Bay was about $1.7 billion, CNBC said.

Saks Fifth Avenue's parent company Hudson's Bay Co. has approached Macy's Inc. about a potential takeover, according to a Friday morning Wall Street Journal report that cited unnamed sources.

Discussions between Macy's and Hudson's Bay are preliminary and may not lead anywhere, according to the Wall Street Journal.

Macy's shares rose the most in nearly six months Friday after the Wall Street Journal reported that the Canadian retailer has made an approach, citing people it didn't name. Lundgren is retiring as CEO later in this quarter, and previously wasn't planning on selling the company.

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Hudson's Bay has been eager to expand its footprint in the U.S.However, Macy's would be a challenge for Hudson's Bay to absorb.

Share of Macy's were up more than seven per cent, trading at $32.99 United States on the New York Stock Exchange.

Macy's, which has been grappling with declining sales for two years now and is closing 63 stores this year and reducing staff by 10,000 people, owns such iconic stores as its Herald Square flagship in Manhattan and the Macy's in San Francisco's Union Square.

Hudson's Bay Co.'s stock (TSX: HBC) jumped roughly half a point from where it opened Friday following the Journal news alert.

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In 2015, Smith said that the company's real estate was worth more than $20 billion alone.

Macy's said in March past year it had tapped William Lenehan, a real estate investment trust expert and a close associate of Starboard, to its board.

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.

Since the story broke, Macy's stock has climbed 5.17%.

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