Hudson's Bay Co has made a takeover approach to USA department store chain Macy's Inc, the Wall Street Journal reported Friday, causing shares to rise.
Macy's stock, traded on the New York Stock Exchange, was up a little more than 8 percent at 10:48 a.m.
Macy's shares were up 6.45% to $32.70 in mid-day trading.
The deal, which is in preliminary discussions, could involve a sale of all Macy's assets or just a deal for the company's real estate.
The celebration and media tour of the new Saks Fifth Avenue specialty store, The Collective, at 200 Greenwich Ave., Greenwich, Conn., Wednesday night, February 1, 2017.
Department store sales suffered in the latest holiday season as shoppers increased the number of items they bought online.
The Associated Press says, "The reported talks come as Macy's faces pressure to turn its business around after struggling with a string of quarters of sluggish sales and stiffer competition".
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A representative for Hudson's Bay also declined comment. Right now, the company has an enterprise value of around $16.0 billion.
Hudson's Bay could raise equity and debt against its real estate portfolio to fund the deal, according to the Wall Street Journal, which first reported the news.
Hudson's Bay is quite a bit smaller than Macy's on some key measures.
Earlier this week, reports surfaced that Macy's outgoing CEO Terry Lundgren was becoming more willing to sell the store chain he's headed for 13 years to avoid a looming battle for control of its board. Already, Macy's has seen major carnage in its stock.
A takeover of Macy's may placate activist investor Starboard Value LP, which has been pushing the retailer to wring more money from its real estate portfolio and consider forming a REIT.
Shares of Macy's Inc.
Several sources said that Smith is seeking board seats at Macy's.