Unit of Japan’s Nomura Wants Link to Macy’s : Retailing: The securities firm reportedly may seek to finance the store’s reorganization.

R.H. Macy & Co., already the target of a merger proposal from competitor Federated Department Stores, has caught the eye of Nomura Securities International Inc., which may want to finance the retailer’s reorganization, people familiar with Macy’s bankruptcy case said Sunday.

Nomura, the U.S. investment banking unit of Japan’s Nomura Securities, has informed Macy’s of its efforts to form a proposal for the New York-based retailer and has held talks with Macy’s bondholders, sources said.

Macy’s filed for Chapter 11 bankruptcy protection in 1992.

Cyrus Vance, the court-appointed mediator in Macy’s case, is also aware that Nomura is working to play a role in the company’s reorganization. But some of Macy’s secured creditors said they have yet to be approached by the investment bank.

“I know nothing about it,” the senior creditor said.

Nomura, a major player in the mortgage business, wants to assist in the financing of Macy’s reorganization but is not looking to own the company after it emerges from bankruptcy, one bankruptcy source said.

It would base its deal on its ability to raise funds and would not rely as heavily on the use of equity as does a separate proposal by Macy’s and Federated Department Stores, which seeks to merge with Macy’s.

Nomura’s offer would probably involve the refinancing of Macy’s real estate, one source said. The real estate would then be used as collateral for new bonds, the sale of which would go toward paying off creditors, sources said.

P.J. Johnson, Nomura’s spokesman, declined to comment. Macy’s spokeswoman Laura Melillo also had no comment.

Some of Macy’s creditors said Nomura’s bid is flawed because it calls for strapping an already highly leveraged company with even more debt.

Macy’s does expect to make a profit during its first year out of bankruptcy, which makes it an even less attractive candidate for such a leveraged deal.

Nonetheless, many involved in the Macy’s case have long expected the retailer would attract new bidders. Little Rock, Ark.-based Dillard Department Stores had also expressed interest in some of Macy’s assets.

The New York Times reported Saturday that Nomura has not made a concrete offer for Macy’s, but it has discussed a rough figure of as much as $3.9 billion.

Macy’s own reorganization proposal calls for creditors to receive $3.67 billion plus a potential extra $260 million for unsecured creditors, depending on the value of Macy’s stock over time.

Cincinnati-based Federated, which has acquired a large share of Macy’s debt, has proposed merging the two retailers, with a payout of $3.51 billion to creditors.

Vance has asked Macy’s, Federated and a third group made up of Macy’s bondholders to submit revisions to their proposals for the company today.

Under ground rules set by Vance, Macy’s bidders have received his approval before distributing proposals to creditors.