Retailer Kohl’s has revealed that it has entered into exclusive talks with retail holding group Franchise Group, which wants to buy the retailer for $60 per share.
Kohl’s would be valued at around $8 billion at such a price. Kohl’s stock closed Monday at $42.12, giving the firm a market capitalization of around $5.4 billion.
According to a person familiar with the situation, Franchise Group is collaborating with Oak Street Real Estate Capital to finance the transaction mostly through real estate. Because the deal hasn’t been consummated, the person requested anonymity.
A spokesperson with Oak Street Real Estate could not be reached for comment on the matter.
The transaction is still subject to approval by the boards of directors of both companies, according to a news release from Kohl’s. It stated that there is no assurance that an agreement would be achieved.
The three-week exclusivity period will allow Franchise Group — which owns the Vitamin Shoppe and Buddy’s Home Furnishings, among other brands — and its financing partners to finalise due diligence and financing arrangements, as well as the parties to negotiate binding documentation, according to Kohl’s.
The retailer also stated that it will make no further comments until an agreement is reached or the conversations are concluded.
Kohl’s has been embroiled in a controversy for more than six months.
Engine Capital, a New York-based hedge fund, originally recommended the off-mall department store company to consider a sale or another alternative to increase its stock price in early December 2021. Kohl’s stock was trading about $48.45 at the time.
The activist hedge fund Macellum Advisors then put pressure on Kohl’s to contemplate a sale in mid-January. Jonathan Duskin, CEO of Macellum, said that executives were “materially mismanaging” the company. He also stated that Kohl’s real estate has a lot of untapped potential.
Kohl’s said in early February that it has hired Goldman Sachs and PJT Partners bankers to assist the business in fielding offers.
Kohl’s said last month that its sales for the three months ended April 30 decreased to $3.72 billion from $3.89 billion. In addition, the company reduced its profit and revenue forecast for the whole fiscal year, disappointing investors and clouding the picture for a potential acquisition.
In late January, Kohl’s stock reached a 52-week high of $64.38.
(Adapted from FoxNews.com)
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