We established a position in Macy’s (M), the operator of about 900 Macy’s, Bloomingdale’sand Bluemercury stores, at an average price of $45.69. Earlier in 2015, with the stock at $70,an activist argued that the store real estate could be separated to unleash a valuation in excessof $125 per share. Management determined a whole-company REIT wouldn’t provide therequired operational flexibility.
Now, with the stock closing the year at $34.98, the math might make more sense. While it’sunlikely that management will reverse course on its own, it wouldn’t surprise us if a privateequity firm teamed up with a REIT to buy the company and unlock the value privately. Continue Reading »