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Speaker 1: We're watching shares of Macy's after the retail rejected a

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Speaker 1: five point eight billion dollar takeover bid from our House

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Speaker 1: Capital Management and Brigade Capital Management. The offer represents about

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Speaker 1: a nineteen percent premium to Macy's closing price on Friday.

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Speaker 1: Macy CEO Jeff Jennette says the proposal is not actionable

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Speaker 1: and fails to provide compelling value to Macy's shareholders. We're

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Speaker 1: going to discuss this with one of those activist investors,

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Speaker 1: Ark House managing partner, Gavriel Kohane. And when you looked

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Speaker 1: at Macy's response over the weekend, the question I have

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Speaker 1: for you is how do you now plan to respond?

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Speaker 2: Once again, Yeah, that's a good question. I think that's

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Speaker 2: largely going to be dictated by the company's moves over

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Speaker 2: the coming days and weeks. Our sincere hope is that

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Speaker 2: they send us an NDA so that we can know

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Speaker 2: a confidentiality agreement so that we can share more information

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Speaker 2: on our financing with them, which we've requested, you know,

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Speaker 2: on multiple occasions, and also get access to additional information

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Speaker 2: that would enable us to increase our offer, as we

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Speaker 2: indicated when we initially made the offer over seven weeks ago.

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Speaker 1: At this point, what would it take to get a

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Speaker 1: deal done? Would you bring in an additional set of investors,

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Speaker 1: or how much would you materially raise the offer to

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Speaker 1: make it compelling for shareholders at this point?

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Speaker 2: Yeah, So, like I said, we are very hopeful that

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Speaker 2: we can increase our offer if we get access to

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Speaker 2: that relatively limited diligence that we need, and for that

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Speaker 2: reason we've made the request. The response was, unfortunately from

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Speaker 2: the company, that it was premature to even begin negotiating

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Speaker 2: an NDA at that time. So I'm sure, as you

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Speaker 2: can imagine, we were somewhat surprised by the company's public

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Speaker 2: response to us yesterday. You know, to the extent it's

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Speaker 2: premature to begin negotiating an NDA to you know, give

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Speaker 2: us access to that information or to hear more about

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Speaker 2: our financing, I'd imagine it's also premature to dismiss our

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Speaker 2: group as not credible or without the funds to complete

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Speaker 2: said transaction.

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Speaker 1: Where are you getting the funding to make the transaction work?

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Speaker 2: So our investor group has multiples of the enterprise value

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Speaker 2: in readily available funds to complete this transaction, and we've

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Speaker 2: expressed that to two Macy's. We've walked them through our capitalization,

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Speaker 2: and on multiple occasions they've told us, you know, over

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Speaker 2: the last seven weeks that they had no additional questions

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Speaker 2: with respect to our financing. So to hear the questions again,

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Speaker 2: you know, kind of brought out publicly last night instead

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Speaker 2: of to us directly with somewhat surprising. And we definitely

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Speaker 2: encourage the company to ask us for any additional information

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Speaker 2: that they might be seeking, because my view is like

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Speaker 2: it's all relatively easily answerable. For example, they cited a

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Speaker 2: twenty five percent equity check that we evidenced in our capitalization.

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Speaker 2: That's not the equity that we have to close the deal.

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Speaker 2: In fact, it's closer to fifty percent, So I feel

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Speaker 2: like there's just something lost in translation a little and again,

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Speaker 2: encourage the company to reach out so we can clarify

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Speaker 2: any of those relatively simple beyond.

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Speaker 1: Your discourse with the company itself. What about other investors.

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Speaker 1: Have you already begun to contact those investors and what

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Speaker 1: has their reception been like?

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Speaker 2: So we've not really actively you know, just this morning

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Speaker 2: on a non solicited basis, got a call from a

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Speaker 2: very substantial investor, a private retail investor in the name

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Speaker 2: who you know who claims to own about ten million shares,

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Speaker 2: so a very big retail investor at that and you know,

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Speaker 2: he called sort of excitedly to see that there was

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Speaker 2: someone that was hopefully going to unlock the kind of

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Speaker 2: otherwise trap value in this company.

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Speaker 1: Speaking of trap value, let's talk about where Macy stands

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Speaker 1: right now. It's been cutting jobs, it's closing stores. Do

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Speaker 1: you think the company needs to do more in order

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Speaker 1: to cut costs in terms of jobs or more store closures.

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Speaker 2: Yeah, that's that's a good question. I think sort of

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Speaker 2: any of those cost cutting measures are somewhat around the

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Speaker 2: margin as compared to an m and a transaction that

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Speaker 2: can give shareholders a big premium today. While I think

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Speaker 2: there's sort of like a value effort in the right direction,

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Speaker 2: the result will be negligible or deminimus as compared to

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Speaker 2: sort of realizing true hard asset value, real asset value

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Speaker 2: of the company through a transaction with private equity.

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Speaker 1: What about the new incoming CEO, Tony Spring, Do you

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Speaker 1: think he's the right guy.

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Speaker 2: To lead the firm. I've heard, you know, great things

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Speaker 2: about Tony and sincerely hope that we can develop a

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Speaker 2: cooperative relationship in the coming weeks and months and definitely

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Speaker 2: encourage him directly to reach out so that we can

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Speaker 2: talk about how to you know, sort of realize this

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Speaker 2: trap value for shareholders together.

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Speaker 1: You're really known for your background in real estate. When

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Speaker 1: you think about Macy's. The first thing that popped out

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Speaker 1: in terms of this deal was this idea that you

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Speaker 1: can do something with the real estate that exists. How

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Speaker 1: do you plan to monetize the value?

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Speaker 2: Yeah, so you know, it is no secret that we

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Speaker 2: have a background and expertise in real estate, and also

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Speaker 2: a limited secret though somewhat surprise. I think, in some

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Speaker 2: ways maybe the world's best kept secret that Macy's is

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Speaker 2: one of the biggest real estate owners in the country,

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Speaker 2: owning about one hundred million square feed real estate. So initially,

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Speaker 2: certainly that's what us, you know, what drove our interest

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Speaker 2: in the company, And the more we dug, the more

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Speaker 2: confident we felt that it wasn't only their real estate

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Speaker 2: that was incredibly value but also incredibly valuable, but also

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Speaker 2: other real assets that they held on balance sheet, and

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Speaker 2: in our view, all of those that sort of hard

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Speaker 2: asset value can help to catalyze this transition from this

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Speaker 2: publicly held somewhat locked and trapped company to be privately

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Speaker 2: held so that there it can make the necessary changes

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Speaker 2: to you know, live on for another one hundred and

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Speaker 2: fifty years.

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Speaker 1: Gobriy Alcahanni, we are thanking you for your time here.

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Speaker 1: We'll keep an eye on the Macy story and all

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Speaker 1: the developments of the firmt