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The
activist investor, in a letter and presentation to Macy's
management on Sunday, said although it supports the retail
chain's plans of cost cuts, it wants the company to
follow-through with real-estate deals to add more cash in its
reserves, the WSJ said. (http://on.wsj.com/1RhgT5Q)
Starboard said spinning off Macy's real-estate assets could
"create meaningful and lasting value for shareholders," the
newspaper reported, citing the letter it reviewed.
The letter suggested two separate joint ventures, one for Macy's
landmark properties like Herald Square and a second for its
hundreds of mall locations, the journal said.
Starboard added that Macy's stock could trade as high as $70,
nearly double its Friday closing price of $35.89, the Journal
said.
Reuters could not immediately reach Macy's Inc and Starboard
Value for comment outside regular business hours.
Starboard owns a 1.04 percent stake in Macy's, according to
Thomson Reuters data.
In an email reply to the Journal, Macy's said it is reviewing
Starboard's letter and views expressed by the investment firm
are consistent with actions already underway at the company, the
paper said.
Last week, Macy's reported disappointing results and said it
will eliminate more than 2,000 jobs which will help it save $400
million.
Earlier last year, Starboard bought a stake in the company and
said the U.S. retail chain's stock was trading at more than 70
percent below value, and that its highly-prized real estate
assets could be spun off.
By Starboard's estimate, the Herald Square store alone was worth
$4 billion, while properties in San Francisco and Chicago were
worth more than $1 billion. With another 400 mall locations
worth about $13 billion, Macy's had a real-estate value of about
$21 billion, Chief Executive Jeffrey Smith said at a conference
last year.
(Reporting by Sneha Teresa Johny in Bengaluru; Editing by
Gopakumar Warrier)
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