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Greenlight Capital purchases stake in department store chain Macy’s

Published 20 January 2016

Hedge fund Greenlight Capital has purchased a stake in department store chain Macy’s and is also considering a takeover.

Macy's stake

Greenlight Capital, which is led by David Einhorn, has not disclosed the investment amount for the stake purchase, which was made in fourth quarter. If the investment amount is significant, the amount would not be made public until the filing with Securities and Exchange Commission (SEC), reported wwd.com.

The Wall Street Journal cited Greenlight as saying in a letter to investors that "it wouldn't surprise us if a private equity firm teamed up with a [real-estate investment trust] to buy the company and unlock the value privately." The firm also added with Macy's stock dropping to approximately $35 in 2015, "the math might make more sense."

Since past one year, activist investor Starboard Value has been pressurizing Macy's to get more value out of its huge real estate holdings, which includes the popular Herald Square store in New York.

Starboard had even forced Macy's to form a real-estate investment trust (REIT) in summer of 2015, stating that the move could push up the value of each share up to $125.

Last year, the retailer had said that it was not considering a spin-off and would prefer joint-venture partnerships to take minority interests, reported The Wall Street Journal.

The stake purchase in Macy's is not Greenlight's first investment in fashion and retail -- an SEC filing as on 30 September shows that the fund bought seven million shares in Michael Kors Holdings on the fashion front, and 1.2 million shares in Dillard's Inc. on the retail front, reports wwd.com.

Image: Greenlight Capital is even considering takeover of Macy's. Photo: Courtesy of Mike Strand/Wikipedia.