A shopper prepares to make a purchase at a Kohl’s department store in Peru, Illinois, on May 16, 2019.
Daniel Acker | Bloomberg | Getty Images
U.S. department store Kohl’s may soon receive a second takeover offer as private equity firm Sycamore Partners prepares a bid, days after a consortium backed by activist investment firm Starboard Value proposed to buy the company, three people familiar with the matter said on Sunday. .
Sycamore Partners has approached Kohl’s about a potential offer that would value the company at about $9 billion, a source said. The company is willing to pay at least $65 per share in cash for the company, the sources said.
The news comes two days after Starboard-backed Acacia Research offered to buy Kohl’s for $64 a share, confirming a Reuters report last week that Acacia had approached the company to express its interest in a takeover.
There is no guarantee that Sycamore Partners will make a bid or a deal with Sycamore or Acacia, the sources said. Bloomberg first reported Sycamore’s interest on Sunday, while the Wall Street Journal reported on Acacia’s bid on Friday.
Representatives for Sycamore, Acacia and Kohl’s did not immediately respond to requests for comment.
Sycamore’s interest in Kohl’s speaks to the continued investor interest in the retailer and the trouble brick-and-mortar retailers are facing during the pandemic, which has largely prompted customers to switch buying habits in favor of online retailers.
Kohl’s has been under pressure from activist investors for better performance for about a year, and their continued dissatisfaction has become more apparent in the final weeks after the company’s shares rose just 5% last year.
Last week, Macellum Advisors, an activist investment firm that owns a 5% stake in Kohl, told the firm to explore strategic options including a sale and warned of plans to nominate directors to the board. Late last year, activist firm Engine Capital also said it hoped Kohl’s would consider a sale.
The new pressure on Macellum comes less than a year after it reached a settlement with two other activists that saw Kohl’s add three new directors to its board. Macellum called 2021 “another failed year” for Kohl’s and criticized the company’s 22% drop in shares from April to last week.
Kohl’s said last week that its “strategy is bearing fruit” and that management and the board “refuse to be distracted” by delivering stronger results for all investors.
Acacia and Starboard, one of the industry’s most respected and busiest activist investors, said it may work with Oak Street Real Estate Capital to try to sell Kohl’s real estate assets to raise additional capital for the deal. Kohl’s has historically opposed sale and leasebacks of its properties.
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