Macy's has settled its proxy fight with Arkhouse — but a takeover is still on the table

Macy’s has ended its proxy battle with Arkhouse Management and Brigade Capital Management after refusing their proposed takeover bids to acquire the 166-year-old department store giant.

New York-based Macy’s said Wednesday that it will add two directors to its 15-person board: Ric Clark, a former executive at Brookfield, and Rick Markee, who also serves on the board of Five Below. Both individuals were nominated for board seats by Arkhouse.

They replace former Macy’s CEO and longtime board chairman Jeff Gennette and former Home Depot CEO Frank Blake, who had previously announced their respective retirements from the board. Macy’s CEO Tony Spring — who took the top job in February — will become the board’s new chair.

Macy’s board “is committed to acting in the best interests of all Macy’s, Inc. shareholders, and the composition of our Board is something we take seriously,” Paul Verga, the board’s lead independent director, said in a statement.

Macy’s stock was down about 1.8% shortly after the market opened Wednesday.

Arkhouse and Brigade initially offered to buy Macy’s in December for $5.8 billion, but the board rejected that offer, citing concerns about their financing plan. Macy’s also said there was a “lack of compelling value” in the offer. The investment firms’ latest public offer was worth $6.6 billion.

Clark and Markee will join the board’s finance committee, which will oversee the evaluation and make recommendations regarding Akrhouse and Brigade’s acquisition proposal.

Arkhouse said Wednesday that it has begun receiving due diligence to move acquisition discussions forward, adding that Clark and Markee’s appointments will ensure that discussions continue to be “constructive.”

“We appreciate the Board’s engagement and look forward to working with them to unlock shareholder value,” Arkhouse managing partners Gavriel Kahane and Jonathon Blackwell said in a statement.

Macy’s has been struggling for years as consumers overwhelmingly adopted online shopping and foot traffic to department store retailers declined. In February, the company said it would close about 150 stores over the next three years and move away from malls. Macy’s in January began laying off 2,350 workers, or about 3% of its staff.