Saks owner Hudson's Bay Co. is struggling to find the money to mount a serious takeover bid for Macy's, reports say.
A much smaller company and more deeply in debt, Toronto-based Hudson's Bay hasn't secured financing for an offer more than a month after soliciting Macy's interest in a deal, Reuters reports. Macy's is skeptical Hudson's Bay will able to raise the money at all and has stopped talking with the rival retailer, the wire service reports, citing unnamed sources familiar with the negotiations.
Hudson's Bay has partnered with mall operator Simon Property Group on joint ventures, but given the poor holiday performance of mall-based retailers the Indianapolis-based company is balking at the prospect of a deal that would greatly boost its stake in more potentially distressed real estate.
Shares of both Macy's and Hudson's Bay tumbled Friday as optimism about a potential merger seemed to evaporate.
Macy's stock dropped as much as 5.4 percent or $1.81 to $31.41 on Friday, while Hudson's Bay shares traded as low as $11.66, down 4.8 percent or 59 cents.