The stock surged as much as 12 percent to $34.37 in NY, the biggest intraday gain since August 11. Discussions of acquiring Macy's real estate are also said to be on the table.
For Hudson's Bay, which runs more than 480 stores around the world, buying Macy's would be a splashy way of expanding in the U.S. New York-based Macy's owns more than 850 stores in 45 states that operate under the Macy's and Bloomingdale's. The department store world has been pummeled by a host of major changes in shopping patterns: Much of our spending is moving online, and these businesses have struggled to grab market share in that arena. The report said the talks were still in early stages and may not lead to a deal.
Representatives for Hudson's Bay and Macy's declined to comment. The company had a market cap of C$1.82 billion (US$1.40 billion) as of Thursday's close. Hudson's Bay, meanwhile, acquired Saks Fifth Avenue back in 2013 for $2.4 billion.
While Macy's is an iconic name, and host of New York's annual Thanksgiving Day parade, the department store has been struggling through a turnaround, engineered by Chairman and Chief Executive Officer Terry Lundgren, who assumed the roles in 2004.
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Hudson's Bay Co.'s stock (TSX: HBC) jumped roughly half a point from where it opened Friday following the Journal news alert. After peaking at $73.61 in 2015, Macy's shares have plummeted in value.
Several sources said that Smith is seeking board seats at Macy's.
Activist investor Starboard Value held around 1 percent of Macy's stock as of September 30 past year, making it the company's 15th largest shareholder. The activist investor has also pushed the retailer to unlock the value of its real estate assets.