Activist group Jana calls on Macy’s to spin off its e-commerce business to fetch higher valuation, report says

FAN Editor

Macy’s Herald Square Flagship Department Store in Midtown Manhattan New York.

Nicolas Economou | NurPhoto | Getty Images

Activist investor Jana Partners is reportedly encouraging the department store chain Macy’s to spin off its e-commerce business, in order to seek a higher valuation from the separate entity.

Jana said in an investor presentation Wednesday that Macy’s online business could be worth about $14 billion, if it were to go through with the split, Bloomberg reported. Macy’s current market value is $6.9 billion.

The move would mimic a similar one from the high-end department store operator Saks Fifth Avenue, which earlier this year spilt off its digital business into a separate company. The deal valued at $2 billion, or about double its annual sales.

Representatives from Jana and Macy’s did not immediately respond to CNBC’s requests for comment.

Macy’s told investors in August that it expected its e-commerce sales this year to be between $8.35 billion and $8.45 billion, after nearly doubling in the past four years.

If Macy’s split off its online business at a sales multiple similar to that of, it would be valued at about $16.8 billion including debt, or $14.1 billion on an equity basis, Bloomberg said, citing Jana’s presentation.

Shares of Macy’s jumped nearly 4% on the report, erasing losses earlier in the day. The stock was recently up less than 1%, having doubled in value year to date.

Find the full report from Bloomberg here.

Free America Network Articles

Leave a Reply

Next Post

Kellogg's strike halts its U.S. cereal production

Work at all of Kellogg Co.’s U.S. cereal plants came to a halt Tuesday as 1,400 workers went on strike, but it wasn’t immediately clear how much the supply of Frosted Flakes or any of the company’s other famous brands would be disrupted. Breakfast cereal sales have spiked during the […]