Department store chain Kohl’s has received takeover bids from private equity firm Sycamore Partners and Franchise Group, a retail holding company, The Wall Street Journal wrote on Thursday, June 2.
Sycamore, which owns various retail clothing brands including Hot Topic and Nine West, will value the department store chain at around the mid-$50s a share, with Franchise Group offering around $60. Kohl’s closed Thursday at $41.18. Sycamore approached the company for a sale as early as March, alongside Saks’ owner Hudson Bay, in talks that were ultimately unsuccessful.
Kohl’s management, while short on the details of the bids, has said it will be looking into them. However, there’s no guarantee that the board will be receptive. Any deal would likely still be several weeks away, with the process
The company has been in the midst of various talks for some time now. Kohl’s put itself up for sale earlier this year when activist investors Macellum and Engine Capital kicked up the conversation stating they weren’t happy with the direction of the retailer. The company only recently fended off an activist investor campaign to overhaul its board, though shares have fallen 17% this year as the pandemic rebound slows.
All of this comes as Kohl’s has indicated that it thinks the company is worth at least $70 a share although market conditions have been worse since then. Kohl’s had been experiencing issues even pre-pandemic, with an operating margin falling to 6.1% in 2019 compared to 11.5% from 2011, despite few changes in its operation.
The report noted that merger activity has slowed down in recent weeks. The factors such as interest rates and market volatility have made deals more expensive.
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